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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

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HM Revenue & Customs
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Schedule 4 Company Share Option Plan (CSOP): Eligibility of individuals to participate: The employment requirement: Full-time directors

The meaning of full-time director is not defined in the legislation. A scheme will not qualify under Schedule 4 if they define a full-time director by reference to a working week of less than 25 hours excluding meal breaks. Hours worked for several participating companies may be aggregated (see below).

This definition of full-time director has its origins in the interpretation of the FA1978 profit sharing legislation and in the context of other references in the Taxes Acts to “full-time working director”, for example paragraph 26 Schedule 5 ITEPA and the reference to commitment of working time in the EMI code.

A person who works for 25 hours per week as a director of 2 companies is unlikely to be a full-time director of both companies. If a director also has a consultancy arrangement with the company it will only be the hours working as a director that can be taken into account when determining whether or not the director is full-time, the hours worked as a consultant should be disregarded. 

If a director or employee works for a number of different companies all of which are constituent companies in the same tax advantaged group scheme, there is no objection to an aggregation of the hours worked in determining whether the “full-time” requirements are satisfied.