As the Minister said, clause 16 makes changes to the company share option plan, a tax-advantaged employee share scheme available to all UK companies and their employees. It will double the employee share options limit from £30,000 to £60,000; remove the “worth having” condition, which limits which types of shares are eligible for inclusion within a CSOP scheme; and make changes to the share options limit, which will now be achievable through secondary rather than primary legislation.

We understand from the Government’s policy paper that this measure seeks to support companies to attract talent and to grow by expanding the availability and generosity of CSOP. They hope to allow companies to offer their employees a greater stake in the company so employees can share in their employer’s success. The changes will help companies that have grown beyond the scope of the enterprise management incentives scheme to offer more attractive share-based remuneration, supporting them to recruit and retain talent. These changes to CSOP were announced not by the Chancellor at the spring Budget 2023, but by the previous Chancellor in September 2022, so it seems we have found one of the very few remaining measures from last autumn’s so-called growth plan.

Although the Minister has set out the details of what this measure involves, I would like to ask her to explain some of the detail behind its operational impact, set out in HMRC’s policy paper. In the section on operational impact, it says that a small IT change will be required to support delivery of the measure, which will be expected to cost less than £5,000. It also says that, due to the relaxation and increased generosity of the CSOP rules, HMRC will undertake increased compliance activity to ensure CSOP is being used appropriately. It says that additional resource will be dedicated to compliance work to support the effective delivery and implementation of this measure, and that this resource is expected to cost a total of £570,000.

Will the Minister confirm whether the additional resource dedicated to that compliance work will be additional net resource at HMRC, or will it involve any redeployment of resources? If the latter is true, will she explain the expected impact on other work carried out by HMRC? We know from a recent Public Accounts Committee report that £9 billion in tax revenue was lost during the pandemic because 4,000 HMRC staff fighting tax avoidance were redeployed. We therefore believe it is important to ask questions about any such potential redeployment. I look forward to a clear answer from the Minister on that point.

Clause 17 specifically removes two requirements for employer companies when granting enterprise management incentives options. First, the clause removes the requirement to set out in a share agreement the details of any restrictions on the shares that can be acquired. Secondly, it removes the requirement for a company to declare that an employee who receives share options has signed a working time declaration, though it does not, however, remove the working time requirement itself.

As the Minister has explained, the changes will apply to EMI options granted on or after 6 April this year, as well as EMI options granted before 6 April that have not yet been exercised. We know that EMI is a tax-advantage share scheme introduced in 2000, targeted at small and medium-sized companies to help them to recruit and retain key employees. We understand, as the Minister said, that following representations made in response to the call for evidence on EMI launched in 2021, the measure will remove administrative requirements for companies using EMI schemes and simplify the process to grant options, so we will not be opposing the clause. However, I look forward to the Minister’s specific comments in response to my questions on clause 16.