4 Ways to Bring Employees into Shares

One of the most powerful tools to support this is employee ownership. When implemented well, employee share schemes can align your team’s interests with the long-term performance of your business. They can also foster loyalty, boost productivity, and contribute to a strong, positive workplace culture.

There are several tax-efficient and flexible ways to bring employees into equity, each suited to different business sizes, growth stages, and strategic goals. In this article we outline four key routes to employee ownership and when they might be the right fit for your company.

A CSOP is a government-approved share option scheme that allows employees to acquire shares at a fixed price, with certain tax advantages. It’s often a good fit for established businesses looking to reward and retain staff in a low-risk, tax-efficient way.

Key features:

• Up to £60,000 of share options per employee.
• Exercise price must be at least the market value at grant. Valuations can be agreed with HMRC.
• Typically includes a 3-year vesting period.
• No Income Tax or National Insurance on exercise, provided qualifying conditions are met (including holding period and market value at grant). Only CGT is typically payable on the sale of shares
• Only Capital Gains Tax (CGT) due on eventual sale of shares.

EMI schemes are among the most tax-advantaged and flexible share options available. They’re designed for smaller, high-growth companies, particularly startups and scale-ups, looking to retain key staff and align them with business growth.

Key features:

• Up to £250,000 per employee in options; £3 million company-wide limit.
• Options typically granted at market value, which can be agreed with HMRC.
• No Income Tax or NI on exercise if conditions are met.
• Potential for 10% CGT rate under Business Asset Disposal Relief after two years.
• Can include custom vesting schedules, leaver clauses, and performance conditions.

Employee share schemes such as Share Incentive Plans (SIPs) are broad-based share plans designed to give more employees a stake in the business. They’re often run via payroll and provide a mix of company-funded and employee-purchased shares.

Key features of a SIP:

• Free Shares (gifted): up to £3,600/year.
• Partnership Shares (from pre-tax salary): up to £1,800/year.
• Matching Shares (company match on purchased shares).
• Dividend Shares (reinvested dividends).
• Shares held for 5+ years are free of Income Tax and NI.
• Ideal for creating a culture of shared ownership across your team.

Growth shares are a highly flexible way to give employees a stake in future business growth without sharing current equity value. They're commonly used in private companies as an alternative to traditional share options.

Key features:

• Employees only benefit from growth above a threshold (e.g. current company value).
• Typically no upfront cost to the employee.
• Can be highly tax-efficient if structured correctly.
• Suited to rewarding future contribution without diluting existing value.

Introducing employee ownership can be a game-changer for your business, but it is important to remember that there is no one-size-fits-all solution. The most effective structure depends on your business’s size, objectives, lifecycle stage, and the specific talent you’re looking to retain or incentivise.

At Oldfield Advisory, we’ve helped implement a wide range of share schemes which are tailored to each client’s specific needs and goals.

If you’re exploring employee share ownership as part of your growth or retention strategy, we’d be happy to arrange a conversation with one of our expert tax advisers.

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For more information on how we can help you and your business, please contact us via info@oldfieldadvisory.com or call 02476673160 for support and advice. Let’s work together to grow and strengthen your business.

Please note: This article is provided for information only and was correct as at the time of writing (24/07/25). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.