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Minimum wage calculation checklist [Archived]

Minimum wage calculation checklist [Archived] ARCHIVED: This Checklist has been archived and is not maintained. In general, this calculation looks at actual cash flows and payments between the employer and the worker (and vice versa) rather than entitlements. For further information on the different elements of this calculation, see Practice Note: National minimum wage, in particular the section: Checking pay against the minimum. For a checklist summarising the main issues to consider when determining whether or not someone is entitled to receive and receives the minimum wage, see: Minimum wage compliance checklist. Pay = (A + B) - (C + D) where: • (A) is actual payments • (B) is deductions to be added back to the actual payments • (C) is excluded payments and benefits • (D) is deductions to be subtracted from the actual payment (A) Actual payments These are: • actual payments made in the pay reference period (including pay and expenses) • actual payments made in the following pay reference period which are referable to the...

EMI share options—checklist to determine whether a company and its employees qualify

EMI share options—checklist to determine whether a company and its employees qualify Enterprise management incentives (EMI) options are tax-advantaged share options which a qualifying company with fewer than 250 employees can grant on a discretionary basis over shares worth up to £250,000 per individual and £3,000,000 in aggregate (in both cases the shares are valued as of the date of grant and ignoring any restrictions) and are intended for use primarily by small and growing companies. The legislation relating to EMI options sets out numerous requirements that must be met, including in relation to: • the company granting the options • the individuals being granted the options, and • the terms of the options themselves This Checklist focuses on the requirements that must be satisfied in order to gain the income tax relief provided for in Part 7, Chapter 9 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). This Checklist merely provides a guide to the legislative requirements relating to a company and its employees that must...

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Income tax and NICs treatment of EMI options on exercise flowchart

Income tax and NICs treatment of EMI options on exercise flowchart The enterprise management incentives (EMI) scheme is a highly flexible and tax-efficient scheme designed specifically for small or medium-sized companies. While the EMI eligibility criteria are very strict, this is countered by the fact that the income tax and National Insurance contributions (NICs) treatment of qualifying EMI options which have been implemented and operated correctly is extremely favourable. This flowchart details the income tax and NICs treatment of qualifying EMI options as detailed in sections 527–541 of the Income Tax (Earnings and Pensions) Act 2003. For an explanation of the capital gains tax treatment of EMI options, see Practice Note: EMI—CGT, including business asset disposal relief (previously entrepreneurs' relief) and corporation tax relief. This flowchart must be

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Personal service companies—the key benefits and key tax considerations

Personal service companies—the key benefits and key tax considerations A worker can provide services in a number of different ways. The most common arrangement is an employment relationship, which means that the employer has to operate PAYE on the amounts paid to the employee, comply with real time information (RTI) obligations, pay employer National Insurance contributions (NICs), and comply with numerous employment law requirements. The employee receives his earnings net of income tax and employee NICs. A significant minority work as self-employed individuals, either on their own or in partnership, supplying their services to clients. Such individuals are responsible for reporting and accounting for their own income tax and NICs liabilities. It is ultimately a question of fact in each case whether a worker is self-employed or not, see Practice Note: Establishing employment status. A further type of arrangement is for the worker to provide services through an intermediary, such as a personal service company (PSC) or a partnership. There may be a number of commercial and...

Disguised remuneration—the relevant steps

Disguised remuneration—the relevant steps This Practice Note focuses on the meaning of a 'relevant step'. One of the requirements set out in the 'gateway' to the disguised remuneration rules (in section 554A of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003)) is that 'a relevant step is taken by a relevant third person'. There are four main types of relevant step: • earmarking cash or assets, or holding them on behalf of someone, with a view to taking a later relevant step by or on behalf of the beneficiary or any other person • giving or transferring cash or assets to a person, or making or writing off a loan • allowing a person to use assets, as if they were their own, and • granting a lease of premises for a period of more than 21 years However, the employer or member of the same group of companies who acts as a trustee or takes steps in relation to an employer-financed retirement...

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Share purchase agreement—pro-buyer—corporate seller—conditional—long form

Share purchase agreement—pro-buyer—corporate seller—conditional—long form This Agreement is made on [insert day and month] 20[insert year] Parties 1 [Insert name of selling corporate entity] incorporated in [England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Seller); 2 [Insert name of purchasing corporate entity] incorporated in England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Buyer), and 3 [Insert name of guarantor entity] incorporated in England and Wales OR [insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Guarantor) [(each of the Seller, the Buyer and the Guarantor being a Party and together the Seller, the Buyer and the Guarantor are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in [England and...

Legal due diligence questionnaire—private M&A—share purchase

Legal due diligence questionnaire—private M&A—share purchase Dated [insert date] Introduction This legal due diligence questionnaire relates to the proposed purchase by [insert buyer name] (the Buyer) of the entire issued share capital of [insert name of target company] Limited incorporated in England and Wales under number [insert company number] (the Company) from [insert seller name] (the Seller) (the Proposed Acquisition). This questionnaire is designed to enable the Buyer, the Buyer's solicitors and other professional advisers involved in the Proposed Acquisition to obtain the information which the Buyer requires to assist in its valuation of the Company. Please answer every question fully. Please provide your answers in italics underneath each question and provide copies of all relevant documentation, ensuring that all answers and documents are clearly marked by reference to the appropriate paragraph of this questionnaire. We reserve the right to raise further enquiries in respect of both your responses to this questionnaire and generally. Definitions Business • means the business of [insert...

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How can the income tax exemption that is contained at section 413A of the Income Tax (Earnings and Pensions) Act 2003 apply when an employee has paid the lawyer for the legal costs incurred in respect of the termination?

How can the income tax exemption that is contained at section 413A of the Income Tax (Earnings and Pensions) Act 2003 apply when an employee has paid the lawyer for the legal costs incurred in respect of the termination? Pursuant to section 413A of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), there is no charge to tax on certain legal costs paid by the employer on behalf of the employee. To be paid tax free, the following conditions must be fulfilled: • the payment must meet the whole or part of the legal costs incurred by the employee exclusively in connection with the termination, and • either: ◦ the termination of the employment results in a settlement agreement between the employer and employee, which provides for payment to be made by the employer directly to the employee’s lawyer, or ◦ the payment is made pursuant to a court

Is it possible to grant an enterprise management incentives (EMI) option which can be exercised on an exit but which also allows the board, with the approval of the shareholders, additional discretion to permit exercise in other circumstances?

Is it possible to grant an enterprise management incentives (EMI) option which can be exercised on an exit but which also allows the board, with the approval of the shareholders, additional discretion to permit exercise in other circumstances? Case study Such discretion would be useful in relation to a family-run company, in the event that there is a deterioration in the health of the current majority shareholder, who is also the managing director, and it becomes necessary for the optionholder, who is to become the replacement managing director, to acquire shares in order to facilitate the running of the company. Can the future managing director be granted an enterprise management incentives (EMI) option which covers this eventuality? Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) sets out the requirements which must be met in relation to the terms of EMI qualifying options. These contain no restrictions on the circumstances in which EMI options may be permitted to be exercised, except that the option must be...

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Share Incentives weekly highlights—17 October 2024

This week's edition of Share Incentives weekly highlights includes: (1) the Lexis+ Share Incentives team’s analysis of the updated version of the Investment Association Principles of Remuneration, (2) publication by HMRC of updated guidance in relation to the EMI independence requirement, including the meaning of ‘arrangements’, and also in relation to the Supreme Court decision in Vermilion Holdings Ltd, as well as Employment Related Securities Bulletin 57 and (3) publication of the latest Share Schemes Forum minutes.

Tax weekly highlights—17 October 2024

This week's edition of Tax weekly highlights includes:(i) the provisions of the Budget Responsibility Act 2024 coming into force on 15 October 2024, (ii) News Analysis of the UT’s decision on the application of a conforming interpretation of the exit tax legislation in Trustees of Panico Panayi Accumulation and Maintenance Settlements No 1 to 4, and (iii) News Analysis of the FTT’s decision in BTR Core Fund JPUT in respect of a claim for SDLT overpayment relief.