HMRC has issued Spotlight 28: Employee Bonus Schemes - Growth Securities Ownership Plan and other avoidance schemes based on contracts for difference.

This confirms HMRC's view that contracts for difference, particularly a scheme known as ‘the Growth Securities Ownership Plan’ (GSOP), are not effective.

Under this type of scheme:

HMRC disagrees with the scheme promoters; it consider that payments should be taxed as employment income, subject to PAYE and NIC.

Comment

Employers who are looking to save tax and reward employees could have a far simpler life and fall back on approved share and share option schemes, see Employee share and share option schemes.

Links

 Anti-avoidance: HMRC's spotlights for HMRC’s other spotlights