New year resolution – an MOT for your share plan?

Posted by Jennifer at 11:49 on 3 Jan 2018


Lots of us plan to get ourselves in shape at the start of the new year – there’s a lot to be said for doing the same for your share plans!

If you’ve got a share plan already in place, it might be helpful to think about it a little like you do a car. If you don’t regularly service/MOT/road tax your car you can face hefty bills or risk it being taken off the road. The same is true for your share plan. Effective administration of your plan can prevent your options being unintendedly disqualified. If you fail to submit your share plan annual return you will be looking at a fine from HMRC.

If employees have exercised options and acquired shares, have you registered the new shares at Companies House correctly? Is your share register up to date?

If you’re thinking about a new share plan, again it’s worth looking at the car scenario. A high-end sports car might be nice, but its purchase price and running costs can be exorbitant. A second hand vehicle might be cheaper, but will it reliably get you from A to B?

The same can be said for share plans. A share plan over different share classes with complicated vesting performance conditions might seem attractive, but will it actually give perceived value to your employees and support your business goals, and will it be complicated and expensive to run? Something simpler might meet your objectives just as well, and be more cost effective. On the other hand, a share plan put in quickly, cheaply and without much thought could result in higher costs in the longer term, your plan not being fit for purpose, or the options not being registered correctly thereby disqualifying their possible tax advantaged status.

Here at the RM2 Partnership we can ensure that you pick the right share plan with the right vesting/performance conditions to suit your Company and your employees. We can stop you falling into the pitfalls that can so easily occur. Once implemented we can keep your plan running smoothly, and make sure all the paperwork is up to date.

If your existing share plan is feeling a bit creaky, give us a call and we’ll MOT it for you! If it’s time for a new plan, we can help you with your share plan design, implementation and administration.

Please contact RM2 (020 8949 5522 / or consult our free fact sheet downloads for more information.