Leading independent business law firm Hall & Wilcox has developed a market-first app to help early-stage companies determine whether they qualify for startup tax concessions under the Employee Share Schemes (ESS) rules.
The app takes the user through a series of questions to work out whether the company is considered a startup by the ESS’s definition. If they are, their employees and advisers will be eligible for these startup tax concessions.
While some of the conditions are quite simple, there are also more complex rules that the tool breaks down and steps the user through. This is the first app on the market to focus on the startup tax concession aspect of the ESS.
An ESS can attract and retain high performing employees by enabling them to acquire a stake in their employer company, often at a discount to market value. The receipt of discounted shares/options is considered a taxable benefit. However, the startup tax concessions allow employees to defer the taxing point and also access a highly concessional tax treatment of that benefit, which results in only half the gain being subject to tax.
The ATO has released a set of standard-form documents to assist companies in setting up an ESS that qualifies for the startup tax concessions. However, these documents have limitations and many companies end up seeking legal advice to figure out if they and their employees are eligible for the concessions.
Startup and scaleup businesses in the Hall & Wilcox Frank Lab accelerator program will be able to access the firm’s ESS app, as part of the program’s benefits.
Hall & Wilcox Tax Partner Anthony Bradica says, ‘The startup regime offers tremendous tax concessions. This is the first app in the market that steps through the conditions for startup eligibility in a simple to use format so that an employer can work out whether they and their employees can qualify for those concessions. And at the very least, if an employer has trouble in applying the law, the app will help them to narrow down the line of enquiry to those conditions of the concession on which they might need expert advice.’
Director – Client Solutions Peter Campbell says, ‘I’m really pleased at how quickly our lawyers and the Client Solutions team are collaborating to get these products out there. It’s fine to have an idea, but innovation is about making an actual change. One benefit of the crisis that COVID brings is it creates a sense of urgency to make a difference, along with the will to try new approaches. I am also pleased at how easily we can do things like this in Checkbox, still leaving us room to grow the complexity of the solution as we get feedback and iterate the design.’
Hall & Wilcox uses innovation to continuously improve the way we deliver legal services. We are the firm that delivers Smarter Law. What makes Smarter Law – well, smart – is how we advise, protect, defend and enable our clients’ organisations in ways that actually work better for them. This involves making real client connections, understanding their legal and business challenges, and then putting our heads together with theirs to creatively get from problem to solution.
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