Accredited official statistics

Employee Share Schemes statistics - commentary

Updated 28 June 2024

About this release

Publication date: 28 June 2024

Next publication date: Q2 2025

Frequency: Annually

Coverage: UK

Theme: Economy

These HM Revenue and Customs (HMRC) National Statistics provide statistics on tax-advantaged employee share schemes. National Statistics are accredited official statistics.

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 4 share schemes that have tax-advantages to both employers and their employees. Save As You Earn (SAYE) and Share Incentive Plans (SIP) are schemes for all employees. Company Share Options Plans (CSOP) and Enterprise Management Incentives (EMI) are available 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 Income Tax (IT) and National Insurance Contribution (NIC) relief received.

HMRC identified a data processing error affecting published statistics for Employee Share Schemes in tax year ending 2015 to tax year ending 2021. This error did not impact tax liabilities or payments received by HMRC or penalties to customers. We are reviewing the robustness of data used to produce statistics for the period up to tax year ending 2021 and we have withdrawn estimates for the affected years. This publication therefore just relates to tax year ending 2022 and tax year ending 2023.

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. 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. Key Points

Employees received an estimated £660 million in Income Tax (IT) relief and £420 million in National Insurance contributions (NIC) relief in the tax year ending 2023 from tax-advantaged Employee Share Schemes (ESS). This is a decrease of 23% on tax relief from the tax year ending 2022. Enterprise Management Incentives (EMI) remained the largest contributor to the total cost of tax relief.

The total number of companies operating ESS in tax year ending 2023 was 19,990. This is an increase of 7% on tax year ending 2022.

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 is because SAYE is used by more employees as the scheme is available to all employees in a company unlike EMI which is available for certain employees at the discretion of the employer.

Figure 1: Total value of options granted, relievable gains on exercise and IT and NIC relief by scheme, tax year ending 2023

Note: For Share Incentive Plans (SIP), options granted are calculated from the total value of shares awarded. Relievable gains are 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 2023. However, these 2 events should not be compared directly due to a time lag between grant and exercise.

3. Commentary

3.1 Income Tax and National Insurance contributions relief

Table 1 in the accompanying ESS statistics tables shows that users received an estimated total of £1.08 billion in IT and NIC relief in the tax year ending 2023 across the 4 tax-advantaged schemes. EMI is the largest scheme by cost of tax relief with £500 million in the tax year ending 2023. The total relief on CSOP options remain much lower than other schemes at £30 million.

Figure 2 displays the estimated IT and NIC relief in the tax year ending 2023 for all schemes.

Figure 2: Estimated amount of IT and NIC relief by scheme, tax year ending 2023

Figure 3 displays the total relievable gains and average relievable gains per exercise event. EMI has the largest total gains and average gains per exercise event. Figure 3 shows that although SIP and SAYE have a large total value of relievable gain compared to CSOP, the average gain is smaller due to high numbers of employees within these 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 much higher at £250,000 per employee. As such, the gain per exercising event 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 2023

Note: The left axis and bar chart displays the total relievable gain for each scheme, the right axis and point estimate displays the average relievable gain per exercise event as annotated points. For SIP, the average relievable gain per exercise event refers to each instance shares are taken out of a SIP plan.

3.2 Companies operating schemes

Table 2 in the accompanying ESS statistics tables indicates that 19,990 companies operated tax-advantaged ESS in the UK in tax year ending 2023.

Figure 4 displays this split by share scheme and shows that the vast majority, 89%, of ESS companies operate an EMI scheme. This probably reflects the fact that under this scheme companies can offer total share options up to the value of £250,000 in a 3-year period, which is much higher compared to other schemes. It is therefore an attractive means of remuneration for employees in eligible companies. It is also targeted at smaller companies which are more numerous than larger companies.

Figure 4: Number of companies with tax-advantaged ESS, tax year ending 2023

3.3 Combination of schemes

Companies can operate more than one type of scheme and this has been broken down in Table 7, found in the accompanying ESS statistics tables. This shows that most companies only operate one type of scheme. For example, in the tax year ending 2023, 99% of companies operating EMI did not operate any other tax advantaged schemes. There are a much smaller number of companies running 2 or 3 schemes, and fewer than 10 running all 4 schemes. These patterns are similar to those seen in tax year ending 2022.

3.4 Comparisons between schemes

Figure 5 shows that SAYE schemes have the highest total value of options granted for the tax year ending 2023 at £1.97 billion, an increase of 18% on the tax year ending 2022. However, the average value of options per grant is much lower for SAYE than for EMI at £5,690. This is driven by SAYE having a large number of participants.

The average value of shares awarded for SIP, the other scheme available to all employees alongside SAYE, is much lower at £220 per award. Employees using SIP may, however, receive multiple awards per year.

The average value of options per grant is much higher for EMI than all other tax-advantage ESS despite the total value of EMI options granted not being the highest. In the tax year ending 2023, the average value of options per grant was £11,910 for EMI. The higher values for EMI reflect the significantly higher limits on the maximum value of options that can be granted under the scheme.

CSOP had an average value of £9,130 in the tax year ending 2023. This scheme limited employees to a maximum of £30,000 in granted options for the tax year ending 2023. This limit has since been increased to £60,000 for the tax year ending 2024 onwards and will first be reflected in our statistics for that year.

Figure 5: Total value of options granted (shares awarded for SIP) by tax-advantaged schemes, tax year ending 2023

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 value of options granted or awarded as annotated points.

Figure 6 shows that more employees exercise SAYE options than CSOP, EMI or SIP options. This was also the case in the tax year ending 2022. Please note: SIP is not directly comparable to the other tax-advantage ESS, as SIP awards shares rather than granting share options. In Figure 6, values for SIP relate to employees taking shares out of their SIP plan.

Figure 6: Number of employees exercising options by tax-advantage scheme, tax year ending 2023

3.5 Number of companies granting options and companies with employees exercising options

Figure 7 shows that the total number of companies where employees have been granted options or been awarded shares and the number of companies where employees have exercised options or taken shares out of plan in the tax year ending 2023.

The total number of companies in which share options were exercised was 3,370 in tax year ending 2023. This is the same as the tax year ending 2022. There are far fewer exercises than grants for EMI in the tax year ending 2023. 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 that there is a better investment elsewhere. A drop-off between the numbers granting and exercising will be seen if companies cease operating, or their share fall in value, thus removing the possibility or incentive for employees to exercise shares.

Figure 7: Number of companies granting options (awarding shares) and exercising, tax year ending 2023

Statistical contacts

Y Kazalova, N Rogers, A Samad, J Peasland and R Waite

[email protected]