6 April 2010 is fast approaching and many companies are now considering acceleration of both cash and share incentives so as to avoid their employees earning more than £150,000 per annum being required to pay the 50% income tax rate on those awards. Please see our client briefings on acceleration considerations for cash and share awards.
The ABI's December 2009 Position Paper on executive remuneration stated that the Company should make sure that any tax efficient schemes "take account of the need not to incur extra costs through higher overall payments or an increase in the company's own tax bill". The ABI also highlighted that shareholders would be alert to potential reputational damage caused by tax avoidance structures. However, such comments seem largely aimed at structures which seek to capitalise gains, rather than structures which are designed to merely accelerate the incentives (which is reasonably common and unlikely to cause reputational issues).
No anti-forestalling measures have been introduced by the Government, however time is running out to take advantage of the 40% income tax rate and companies will need to act quickly if they wish to do so.