Case Study: Project Resource
Project Resource is a recruitment company specialising in the fields of construction, infrastructure and civil engineering recruitment. They began trading in 2002 and have since then continued to grow to a staff of 40+ with both a Reading recruitment office and a Solihull recruitment office with plans for a third office to open in the North West in 2011. The company has ambitious growth plans to expand further in the coming years.
The company directors were interested in providing their key and long-term staff with additional benefits in the form of equity, rather than offering tax inefficient cash bonuses to staff. Managing Director Bill Wynn decided to use RM2 because of their professional pitch, their experience, positive references and strong recommendations.
RM2 has recently implemented an Enterprise Management Incentive (EMI) plan for Project Resource. The EMI was recommended for the company as it offered the most flexibility in design for a fast growing company with less than 250 employees, coupled with the most advantageous tax breaks under the HM Revenue & Customs' approved and registered share option plans. The advantage of the EMI for the participants is that the share price is agreed in advance with HMRC, is heavily discounted, and allows for a considerable uplift in potential gain for the employees, as the value of the company grows.
The plan is also tax efficient for both the participants and the company as it puts participants into capital gains tax rather than income tax on the subsequent sale of shares, and the company receives corporation tax relief on the gain in the value of the shares passing to the participants.
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