UK Announces Changes in Employee Incentives as of September 2025
In the world of business and finance, several significant developments have been announced that are set to impact employers and business owners. Here's a rundown of the latest updates.
Firstly, the introduction of mandatory payrolling of benefits in kind has been delayed until 6 April 2027. This means that employers will have more time to prepare for the changes in reporting systems. However, further information about the mandatory payrolling beyond the delay has not been disclosed as of yet.
In Belgian news, the federal government plans to introduce a new capital gains tax on financial assets from 1 January 2026. This proposed new regime could potentially impact 'qualifying' employee stock options. Our firm's Belgian team has published an Insight on this topic, providing valuable insights into the implications.
From April 2027, employers will have the option to voluntarily payroll employment-related loans and accommodation. Additionally, the new reporting system for benefits in kind and expenses will be mandatory for most benefits and expenses from the same date. HMRC will provide draft legislation, guidance, and technical information for this new system from autumn 2025 onwards.
The Autumn Budget on 26 November may include an update on the draft legislation for the new reporting system. In the meantime, software providers and employers are seeking further information to prepare for the significant change.
Employee Ownership Trusts (EOTs) continue to garner attention among business owners due to their potential tax benefits and improved employee engagement. An upcoming webinar titled 'Employee Ownership Trusts: Tax-Smart Exits, Culture Gains - Are They Right for Your Business?' will take place on Tuesday 21 October at 10:00. This event is intended for business owners looking to transition their company to an EOT structure, as well as investors and companies interested in acquiring EOT-controlled businesses.
Recent increases in the Capital Gains Tax (CGT) rate have made the sale of businesses to an EOT more attractive. HMRC has been consulting on draft legislation to allow the terms of existing enterprise management incentive and company share option plan options to be amended to include a right of exercise where resulting shares will be immediately sold on the new PISCES platform.
Regarding the sale of businesses to an EOT, the consulting firm that advised on Big Potato Games' £16.2 million investment is not specified in the available search results.
Finally, the webinar will share experiences in assisting companies to become EOT-owned and the sale of EOT-controlled companies. With these developments, it's an exciting time for businesses looking to explore new structures and strategies. Stay tuned for more updates.
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