Share scheme relief wanes in 2020-21

Employees received £760m in income tax and National Insurance relief from tax-advantaged employee share schemes in 2020-21 according to recent statistics from HMRC. This is a fall of £110m from the relief received in 2019-20.

The cost of tax relief by scheme has varied compared to last year: tax relief from save-as-you-earn (SAYE) options and share incentive plan (SIP) awards has decreased by 44% and 25% respectively while company share option plans (CSOP) and enterprise management incentive (EMI) options remained broadly consistent. However the total relief on CSOP options remain much lower than other schemes at £40m and EMI has been the largest scheme by cost of tax relief since 2018-19 currently £400m in 2020-21.

The figures reveal that the total number of companies operating employee share schemes in 2020-21 was 16 330. This is an increase of 6% from the previous...