Keeping On Top Of Your KEEP Obligations

What is KEEP?

The Key Employee Engagement Programme ("KEEP") is a tax efficient share option scheme for small and medium-sized enterprises ("SMEs") and start-up businesses which is designed to support SMEs in their efforts to attract and retain key employees. SMEs can be at a disadvantage when competing with larger companies and KEEP provides some scope for smaller innovation driven enterprises to compete for top talent.

In general, where an employee or director exercises a share option, they are subject to income tax on the difference between the market value of the shares acquired and any price paid for those shares. Employees and directors can face difficulties in funding the tax liability where they do not immediately dispose of the shares received on exercise of the option.