Setting up and administering SIPs

Produced by Tolley in association with

Employment Tax

Guidance

Introduction

In the past, share incentive plans (SIPs) ― along with SAYE and CSOPs ― had to be approved by HMRC to receive the intended tax advantages; however, since 2014/15, a system of online self-certification has replaced this process.

Once the SIP is implemented, the plan must be registered with HMRC, and an annual return must be submitted each year showing share awards made and removed from the plan during the previous 12 months.

Legal drafting of plan documentation

HMRC has provided a review document at ETASSUM28210 to assist those setting up a SIP to ensure the plan documents meet all legislative requirements.

There are also template documents ETASSUM28220, ETASSUM28230, ETASSUM28240 and ETASSUM28250 to use as starting points for the key legal documents which form the SIP.

Advance clearance

Clearance on proposed transactions can only be given within the terms of the non-statutory business clearance service. HMRC has indicated that it will respond to general questions of principle in relation to share schemes where these are not covered

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Helen Wood

Founder, HLN WD TX , Employment Tax

Helen Wood is the founder of HLN WD TX, a share schemes and employee incentives advisory business.She qualified as a CA with ICAS in 2009 and has worked as a specialist reward and incentives advisor for 17 years, spending 13 of those at KPMG followed by 3 ½ years as an Associate Director at RSM. Helen has worked with businesses ranging from start-ups to fully listed companies, spanning owner-managed businesses, private equity portfolio companies, and AIM listed businesses.She advises on a wide range of employee share schemes and employment related securities matters including the design and implementation of effective management and employee incentives; tax valuation of employment related securities, buy and sell side transaction support, HMRC compliance, tax due diligence and employee ownership trust transactions.

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