Employee Share Schemes
Rewarding your business’s people is vital to its long-term success. A well-designed employee share scheme can help you retain valuable members of your team, attract talented new people and create rewards which are linked to your company’s success.
At Postlethwaite, we help companies of all sizes create share schemes that are practical, effective and tax efficient. We support start ups, growing businesses, family-run companies, employee-owned firms and listed and international corporations.
If you're exploring how to reward and retain the people who matter most to your business, we’ll help you consider the right choices and guide you from design to delivery.
What is an Employee Share Scheme?
By allocating company shares to workforce, an employee share scheme gives individuals a real stake in their company’s success. As the company grows, so too should the value of their shares, and they may also receive a share of profits through dividends.
An employee share scheme recognises employees’ contribution, encourages long-term commitment and shares the rewards of future success.
Choosing the right approach depends on what you're aiming to achieve, which is where our team comes in. We’ll help you explore your options and shape a truly bespoke scheme that works for your business and your people.
Which employees do you wish to participate?
You may wish to offer shares to a few members of your company’s senior management team or other key people, or you might wish to involve all your employees. You may also want to include consultants or advisers.
Discover the share scheme that’s right for your company
Schemes for senior management or other key employees (known as selective or discretionary schemes)
EMI is a popular, flexible share option scheme for small – medium sized companies. It offers generous tax advantages to both employer and employee.
A CSOP also allows companies to grant tax-advantaged share options to selected employees. It suits larger or more mature businesses that don’t qualify for EMI.
A bespoke share class which gives employees a stake in future growth, without diluting current shareholders’ value. Often used in start-ups or scale-ups, or to align senior staff with the company’s long-term growth.
If you think a share option scheme is right for your company but it’s not eligible for EMI or CSOP, you will probably be able to set up a non-tax advantaged share option scheme.
LTIPs are similar to non-tax advantaged share options, usually conditional on the company achieving a long-term performance. Common in listed companies, they can also be tailored for private firms.
- Other Schemes including share purchase, restricted shares and Joint share ownership plans (JSOPs)
JSOPs involve employees co-owning shares with a trustee. They benefit only from the growth in value above an agreed threshold, which links reward directly to company performance.
Schemes for all employees
Consider a SIP if you want all your employees to acquire an immediate ownership stake. Tax reliefs enable this to be done at reduced or even no cost to employees.
SAYE schemes allow employees to save monthly and use those savings to buy shares at a discounted price, with tax reliefs.
How we help set up your employee share scheme
Our first step is always to listen. We want to understand what you’re hoping to achieve, who you want to reward, and how your business operates. From there, we can help shape an employee share scheme that fits your goals, aligns with HMRC rules, and makes sense for your people.
Here’s how we work:
- Initial consultation – We clarify your objectives and help you explore suitable scheme types.
- Design and tailoring – We recommend a share scheme to suit your commercial goals, team structure, and timelines.
- Legal drafting – We prepare all the necessary documents and ensure they are clear, compliant, and tailored.
- HMRC support – Some share schemes require advance HMRC agreement. We will arrange this and advise on what you need to tell HMRC about your share scheme once established.
- Employee communications – This is critically important, as your employees need to understand how their share scheme works. We help you explain the scheme clearly to your team.
- Ongoing support – We’re here to help with future updates, queries, or changes as your business evolves.
Our aim is to make this process as smooth and constructive as possible, always with a clear eye on your strategic objectives.
Frequently asked questions about employee share schemes
These terms are often used interchangeably but typically:
- An employee share scheme involves employees holding shares personally, normally alongside other shareholders and over a small total percentage (typically 10-15% maximum)
- employee ownership tends to mean where a company has taken a further step, with all its employees holding a significant, often a majority stake. An example of this would be an Employee Ownership Trust (EOT).
The best share scheme for your company will depend on your objectives, company structure, and team. EMI is often the first choice for growing businesses with less than 250 employees (less than 500 employees from 6th April 2026). We’ll help you compare your choices and choose what fits.
Yes. EMI, CSOP, SIP and SAYE each offer considerable tax benefits. These depend on the scheme but can include:
- reduced or no tax on gains from shares’ growth in value,
- income tax relief on salary used to buy shares and
- free shares without tax.
- Your company may also be able to claim corporation tax relief for value delivered to employees.
We’ll help ensure your scheme qualifies for any available tax breaks.
This will depend on the share scheme. A scheme without tax advantages can often be set up quickly, sometimes within two to four weeks. A tax-advantaged scheme, may take longer. We’ll manage the timeline and keep everything on track.
Yes, and many do. Share options can sit alongside an Employee Ownership Trust (EOT) structure, provided they’re designed with care. We help create schemes that reward individual effort while preserving collective ownership.
Share options give employees the right, but not the obligation, to purchase shares at a set price in the future. They are typically used to reward future performance or growth and/or encourage employees to stay.
Actual shares, on the other hand, represent immediate ownership and may come with dividend rights and voting powers.
We’ll explain how each works in practice and help you decide which best aligns with your company’s structure and stage of growth.
Valuation is often a crucial step in implementing any share scheme, especially a tax-advantaged one where HMRC’s approval to a share’s value is likely to be needed. We can help you agree a valuation with HMRC. Where needed, we will also work with other valuation specialists.
Why choose Postlethwaite to guide you through setting up your share scheme?
We’ve been supporting businesses with employee share schemes and ownership transitions for over 20 years. We’re recognised leaders in this field and known for offering advice that is clear, practical, and reliable.
We’re ranked by Chambers & Partners and Legal 500 as specialists in our field. Clients trust us to listen carefully, explain clearly, and tailor our support to their needs.
And as an employee-owned firm ourselves, we know first-hand the value that good share schemes can unlock — for individuals, leadership teams, and whole organisations.
Contact our expert share scheme solicitors today
Please contact our specialist team by calling us on 020 3818 9420 or sending an email to info@postlethwaiteco.com. One of our friendly solicitors will promptly be in touch.