Figures released today (30 June) by HMRC reveal that executives claimed an addition £10 million through two exclusive schemes - Company Share Option Plan (CSOP) and Enterprise Management Incentive (EMI) – despite calls for the tax breaks to be scrapped earlier this year.
One of the schemes, EMI, gave an average tax break of £16,900 per employee in 2016.
In the run up to the last Budget Co-operatives UK and 180 other co-ops and individuals asked the Chancellor to scrap CSOP and EMI and invest some of the money in measures to help ordinary workers own and control their livelihoods. Co-operatives UK was told by a HM Treasury minister that the tax breaks, which are only open to selected employees, would continue as they represented a “good use of public money”.
Ed Mayo, Secretary General of Co-operatives UK said: "At a time of widespread discontent with our economy, when pay and working conditions are under pressure and our public services are stretched thin, we question whether UK tax breaks that hand out hundreds of millions each year to a handful of elite employees can really be justified.
"How can we ever expect businesses to reign in corporate excesses when our own government continues to sweeten executive pay packets at tax payer expense to the tune of £230 million a year? Given the current mood, it is hard to imagine the public will see this as money well spent."
"This looks like one area of government policy that makes our economy more exclusive, for the benefit of the few. We need politicians to get serious about fostering a genuinely inclusive economy, where opportunity, ownership and power are shared broadly.”
HMRC figures published 30 June 2017 here: https://www.gov.uk/government/collections/employee-share-schemes-statistics
- CSOP awarded 20,000 employees £70m in tax breaks - average of £6,480 per employee
- EMI awarded 5,000 employees £160m in tax breaks - average of an average tax break of £16,900 per employee
CSOP and EMI award income tax and national insurance reliefs on the value of share options exercised by employees as part of their remuneration packages. Companies limit access to these schemes to a very select number of employees, usually senior executives.