National statistics

Employee Share Schemes statistics: commentary

Updated 9 June 2023

1. Key points

Employees received an estimated £480 million in Income Tax (IT) relief and £280 million in National Insurance contributions (NIC) relief in the tax year ending 2021 from tax-advantaged Employee Share Schemes (ESS). Enterprise Management Incentives (EMI) were the largest contributor to the total cost of tax relief.

The total number of companies operating ESS in tax year ending 2021 was 16,330. This is an increase of 6% from the previous year.

Figure 1 shows that despite EMI being the largest contributor to tax relief, options granted under Save As You Earn (SAYE) have the largest aggregate value. This may be due to the scheme being available to all employees unlike EMI which is for certain employees at the discretion of the employer.

Figure 1: Total value of options granted, exercised and IT and NIC relief by scheme, tax year ending 2021

Note. For Share Incentive Plans (SIP), options granted is calculated by the total value of shares awarded, and relievable gains is calculated as the total value of shares taken out of the plan. Figure 1 displays the total value of options granted and exercised in the tax year ending 2021. However, these two events should not be compared directly due to a time lag between grant and exercise.

1.1 About this release

Publication date: 30 June 2022

Next publication date: June 2023

Frequency: Annually

Coverage: UK

Theme: Economy

Employee Share Schemes (ESS) are used by companies to award shares directly to their employees or grant options to buy shares. The UK Government offers four share schemes that have tax-advantages to both employers and their employees. Save As You Earn (SAYE) and Share Incentive Plans (SIP) are for all employees. Company Share Options Plans (CSOP) and Enterprise Management Incentives (EMI) are for certain employees at the discretion of the employer.

This release contains statistics on the numbers of companies using schemes, numbers of employees receiving awards or numbers of awards, values awarded, numbers of employees exercising options, and estimates of IT and NIC relief received.

Accompanying statistical tables, and background information on the schemes and the methodology used to produce these statistics, are available in the Employee Share Schemes statistics collection.

1.2 Related publications

Users of the ESS statistics may also be interested in other forms of tax-free savings and investment statistics.

Shares in SIP and SAYE can be transferred into an ISA when they are removed from the scheme.

Capital Gains Tax (CGT) may be due on SAYE, CSOP and EMI shares when they are sold. However, it is not possible to identify how much CGT comes from shares that were part of an ESS as it is not possible to follow these cases through to CGT returns.

Users may also be interested in the Office for National Statistics’ Wealth and Assets Survey, which shows information on the proportion of households with employee shares and share options. This data will cover all ESS, not just the tax-advantaged share schemes covered within these statistics.

Users may also be interested in research that has been published, including an evaluation of EMI and qualitative research which explores motivations and barriers to uptake of tax advantaged share schemes.

2. Commentary

2.1 Income Tax and National Insurance contributions relief

Table 1 in the accompanying ESS statistics tables shows that employees received an estimated total of £760 million in IT and NIC relief in the tax year ending 2021 across the four tax-advantaged schemes. There has been a £110 million decrease in total relief from the previous year.

The cost of tax relief by scheme has varied compared to last year: tax relief from SAYE options and SIP awards have decreased by 44% and 25% respectively, whilst CSOP and EMI options remained broadly consistent. However, the total relief on CSOP options remain much lower than other schemes at £40 million and EMI has been the largest scheme by cost of tax relief since tax year ending 2019, currently sitting at £400 million in tax year ending 2021.

Figure 2 displays the total relief for IT and NIC since tax year ending 2006 in all the schemes. This year, the schemes available to all employees (SIP and SAYE) have a smaller total tax relief than the total of both discretionary schemes (EMI and CSOP).

Figure 2: Amount of IT and NIC relief by scheme, tax year ending 2006 to tax year ending 2021

Figure 3 displays the total relievable gains and average relievable gains per employee with EMI having the largest for both. Figure 3 shows that although SIP and SAYE have a large total value of relievable gain, the average gain per employee is smaller than discretionary schemes due to high numbers of employees within the schemes. Access to EMI schemes is restricted and fewer employees utilize them compared to other schemes but the maximum value of options that can be granted is £250,000 per employee. As such, the gain per employee can be much greater than other schemes where lower limits apply.

Figure 3: Total relievable gain or value on which relief is applied by scheme, tax year ending 2021

Note. The left axis and bar chart displays the total relievable gain for each scheme, the right axis and point estimate displays the relievable gain per employee displayed as annotated points, tax year ending 2021.

2.2 Companies operating schemes

Table 2 in the accompanying ESS statistics tables indicates that 16,330 companies operated tax-advantaged ESS in the UK in tax year ending 2021. This is an increase of 6% from the tax year ending 2020, and 88% since tax year ending 2010. EMI is the main driver in the increase of total companies with tax-advantaged share schemes. Figure 4 displays this trend, which shows a similar trajectory of companies with EMI schemes and all companies operating an ESS as one might expect given EMI is the overwhelming driver of growth.

The increase over time in EMI schemes probably reflects the fact that under this scheme companies can offer total share options up to the value of £250,000 in a three-year period, which is much higher compared to other schemes. It is therefore an attractive means of remuneration for employees in eligible companies.

The number of companies with the three remaining schemes has grown by 2% from the previous year, and decreased 15% since tax year ending 2010.

Figure 4: Number of companies with tax-advantaged ESS, tax year ending 2006 to tax year ending 2021

2.3 Combination of schemes

Companies can operate more than one type of scheme and this has been broken down in Table 7, which is found in the accompanying ESS statistics tables. This shows that most companies only operate one type of scheme. For example, in tax year ending 2021, 99% of companies operating EMI did not operate any other tax advantaged schemes. There are a much smaller number of companies running two or three schemes, and fewer than ten running all four schemes.

2.4 Comparisons between schemes

Figure 5 shows that SAYE schemes have the highest total value of options granted for tax year ending 2021 at £2.59 billion. However, the average value per employee for SAYE is lower than for EMI at £6,720 which is due to SAYE having a large number of participants. This is also the case in the other scheme available to all employees, SIP, with the per person value at £210.

Although the total value of EMI options granted are lower, the average amount granted per employee is higher. The average EMI per employee is £11,650. The higher values for EMI reflect the significantly higher limits on the maximum value of options that can be granted under the scheme. Also, EMI may be offered to select employees whereas SAYE and SIP must be offered to all employees.

CSOP has an average value of £5,290 and is limited to £30,000 per employee.

Figure 5: Total value of options granted (shares awarded for SIP) by tax-advantaged schemes, tax year ending 2021

Note. The left axis and bar chart displays the total value of options granted (shares awarded for SIP) for each scheme, the right axis and point estimate displays the average option granted (shares awarded for SIP) per employee displayed as annotated points, tax year ending 2021.

Figure 6 shows that more employees exercise SAYE options than CSOP or EMI options. SIP has not been included, as SIP awards shares rather than granting share options. Whilst the number of employees exercising options in EMI schemes has increased slightly in recent years, there is an overall decreasing trend for both SAYE and CSOP. For tax year ending 2021 there was a decrease in the total number of employees exercising from the previous year.

Figure 6: Number of employees exercising options in SAYE, CSOP and EMI, tax year ending 2006 to tax year ending 2021

2.5 Number of companies granting and exercising options

Figure 7 shows that the total number of companies where employees have been granted options or been awarded shares has generally been rising since tax year ending 2010. This trend reflects the changes in the number of companies granting EMI options.

The total number of companies in which share options were exercised increased slightly over the last five years, mainly driven by an increase in the number of companies where EMI options were exercised. There are far fewer exercises than grants in each year. Exercising means an employee takes advantage of the option to purchase shares. This is expected within employee share schemes where options may be exercised when circumstances result in a beneficial outcome to the employee or an employee believes there is a better investment elsewhere. A drop-off between the numbers granting and exercising will be seen if companies cease operating, thus removing the possibility for employees to exercise shares.

Figure 7: Number of companies granting options (awarding shares), tax year ending 2008 to tax year ending 2021

Statistical contacts

J Webb and R Waite

personaltax.statistics@hmrc.gov.uk