Model rules for all-employee share scheme now online

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Model rules for all-employee share scheme now online

For those of you considering whether to introduce a new all-employee share plan, the Inland Revenue has recently posted on its web site a batch of useful documents, including model rules. The one-off cost of introducing such a plan in a large company is estimated to range from £ 250,000 to £ 750,000, according to a cost-benefit analysis available on the site.

What you'll find on the Inland Revenue site

For guidance in the form of frequently asked questions, jump to . . . www.inlandrevenue.gov.uk/shareschemes/esp_faqs.htm

The following documents are available for download in DOC or PDF format:

http://www.inlandrevenue.gov.uk/news/budget/ria_draft_ess.pdf

• regulatory impact assessment (20 pages)

www.inlandrevenue.gov.uk/shareschemes/esp_faqs.htm

• model plan rules (21 pages)
  

• a model trust deed (10 pages)

• specimen free and partnership share agreements (two pages each).
  

Estimated cost of introducing an all-employee share plan for a larger company*

Set-up costs
Communication	£ 100,000— £ 250,000
Legal and consultancy fees	£ 50,000— £ 250,000
Arrangements for overseas employees	up to £ 150,000 or more
Employee education	£ 10,000— £ 60,000
Payroll costs — new module added to existing payroll system	£ 10,000
Total (based on a range spanning middle ranking FTSE350 to a FTSE 100)	£ 250,000— £ 750,000
Ongoing costs
Annual communications, including some in-house staff support Maintaining register of employees	£ 100,000— £ 200,000

* The Inland Revenue says it is not possible to split costs for smaller companies (approximately 50 employees) in as much detail. For a smaller company, start-up costs are likely to be in the range £ 20,000— £ 40,000, with ongoing costs typically £ 15,000 to £ 30,000.

Source: Inland Revenue.