Share Option Schemes
A number of changes will be introduced from 6 April 2027 to the tax-advantaged share option schemes, Company Share Option Plan (CSOP) and Enterprise Management Incentives (EMI) scheme.
The current CSOP will be rebranded as EMI2 and will be expanded so that more employees will be able to benefit from growth in their employers’ companies that they helped to generate. The main changes are the increase in the CSOP option limit to £120,000 and the extension of the exercise period to 15 years. The government believe that this will give businesses more opportunity to attract and retain employees in future.
Companies will also no longer be required to submit a separate notification of the grant of an EMI option and this will be able to be done through the end-of-year return from 6 April 2027 meaning lower administration costs for companies.
Employer Compliance
From April 2029, employers will be required to set up a direct debit for PAYE return liabilities, subject to some exceptions. Businesses will continue to be able to use other payment methods to pay their liability before a specified cut-off date. The direct debit instruction will be used to collect any unpaid balances on the due date.
As we expected, the government confirmed that the introduction of mandatory payrolling of benefits in kind and taxable expenses will continue. For company cars and vans, car and van fuel and medical benefits, this will take effect from 6 April 2027. Mandatory payrolling for all other benefits in kind, with the exception of employment-related loans and employer-provided living accommodation, will take effect from 6 April 2028.
Employee Expenses and Benefits
Following on from the increase to the business mileage rates for up to 10,000 miles from 45p to 55p last year, the government announced that it will increase the approved business mileage rate payable above 10,000 miles from 25p to 35p per mile from 6 April 2027.
The government intends to introduce reforms from 6 April 2028 to the Benchmark Scale Rates together with Overseas Scale Rates which are used by employers to reimburse their employees for domestic and overseas travel and subsistence expenses, without the need to check receipts. Benchmark Scale Rates have not seen a rise for over 10 years so will be uplifted to bring them more in line with actual costs. The new rates will be £20 for periods of travel over 5 hours, £60 for over 10 hours and £75 for over 24 hours. There are currently more than 200 different Overseas Scale Rates depending on the country of destination so these will be simplified using a tiered approach that links to the updated benchmark rates.
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