IPSA has warned that the Government’s new dedicated employee share options incentive scheme for start-up companies and SMEs “is not fit for purpose in its current form”.
The Key Employee Engagement Programme (KEEP), announced in Budget 2018, is designed to support small and medium sized businesses in their efforts to attract and retain key employees in a competitive international labour market, by providing for advantageous tax treatment on share options.
However, IPSA says that in its current form, the KEEP initiative is far too narrow in focus and could exclude many of the companies that it should be supporting.
IPSA CEO Gill Brennan said: “There is a pressing need for the introduction of a share options incentive scheme for start-ups and SMEs in Ireland. However, in its current form, KEEP is not fit for purpose.
“There are far too many exclusions from the scheme in its current format. This means that companies in sectors such as fin tech software, software engineering, clinical trial design, and many other areas would be prevented from benefitting from KEEP.
“These companies are among those which face the greatest competition for their staff and which need to be able to offer incentives such as share options.
“Changes to KEEP are needed before it is introduced and IPSA is working with the Department of Finance to try and ensure that the scheme works for the majority of start-ups and SMEs in Ireland.”