BUSINESS life: BUSINESS appointments: Staff set to benefit from share options.

Byline: COLIN LEWIS Business Editor

THE number of firms likely to start offering staff a stake in the business is set to grow over the coming months, predicts Warwickshire law firm Lodders.

Government plans for a new tax break will make it much more attractive for small and medium-sized companies to use share-related benefits or share option schemes to reward and motivate staff, says Stephen Brignull, an associate in Lodders' private client department and a specialist in share option schemes.

The new legislation, expected to be passed later this year as part of the finance bill, simplifies setting up such schemes.

It will also give the company a tax deduction equal to the amount gained by employees from the shares.

He said: " Share option schemes can make good business sense. They offer employees a direct stake in a company's future, they can help in succession planning and they are increasingly being seen as part of an overall remuneration package to attract quality personnel.

"The current, comparatively complicated, arrangements that have to be carried out to maximise the chances of a tax deduction, including the need to set up employee share ownership trusts, have put off many companies.

"This new legislation means they no longer need to be deterred."

"Companies looking to the future should start planning now to ensure that they are ready to take full advantage of the new tax relief when it is introduced."