Use case

Valuations for employee share schemes.

Employee share schemes have specific regulatory valuation requirements that vary by jurisdiction. A Valuion report supports scheme design, grant-price modelling, and internal communication – but formal submissions for most tax-advantaged schemes require a qualified jurisdictional valuer.

Where Valuion helps, where qualified valuers are required

Share-scheme valuations sit in a strict regulatory framework in most jurisdictions. The rules exist to prevent companies understating share value to reduce employee tax liability, or overstating it to inflate paper compensation. Tax authorities are typically quite specific about who can sign a valuation for scheme purposes.

Valuion supports: Planning conversations about whether to run a scheme; modelling the tax impact of different grant prices; communicating with employees about what their options are worth at various scenarios; board or leadership discussions about share-pool size.

Valuion does not replace: The formal valuation submission to HMRC, Revenue, IRS, CRA, or ATO for tax-advantaged schemes. Each jurisdiction has specific rules about who can sign.

Jurisdiction-specific scheme requirements

UK – EMI (Enterprise Management Incentive): HMRC requires Company Share Valuation (CSV) procedures for the option grant price. For straightforward small companies, companies can self-value using HMRC’s published methodology; HMRC can then either agree or challenge. For more complex structures, a qualified share valuer typically prepares the formal valuation. Valuion’s methodology is compatible with the input but the CSV submission requires jurisdictional expertise.

UK – CSOP (Company Share Option Plan): Similar to EMI but with a different regulatory scope. Company self-valuation is permitted for straightforward cases. More complex cap tables typically need a qualified valuer.

United States – §409A valuations: Required for all private-company option grants. Must be prepared by an independent qualified appraiser (Carta, Scalar, Aranca, and similar) or use IRS safe-harbour methodologies. Valuion reports are NOT 409A-compliant and cannot be used for option-grant pricing.

United States – ESOPs (Employee Stock Ownership Plans): Full formal valuation by a qualified ERISA-experienced appraiser required annually. This is a major specialist area; Valuion is not suitable.

Ireland – KEEP (Key Employee Engagement Programme): Similar to UK EMI with Revenue-specific submission requirements. Qualified valuer typically engaged for formal submissions.

Australia – ESS (Employee Share Scheme): Tax-concession schemes have ATO-prescribed valuation methods. Start-up concession has specific safe-harbour methods. For formal submissions, an ATO-recognised qualified valuer is engaged.

New Zealand – ESS: Inland Revenue has specific requirements around the “share scheme taxing date” valuation. Formal submissions typically via qualified valuer.

How to use Valuion in scheme design

The productive sequence:

  1. Run a Valuion Detailed report. Get today’s methodology-grounded baseline.
  2. Model scheme design scenarios. What happens if we grant 100,000 options at today’s strike? What if we reserve 5% vs 10% of the cap table? Use the Valuion baseline to drive these conversations.
  3. Decide scheme structure with your HR and tax advisors based on the modelling.
  4. Engage the qualified jurisdictional valuer for the formal submission. Hand them the Valuion report as the starting methodology; they validate and adjust to jurisdictional requirements.
  5. File the submission with the qualified valuer’s signed valuation.
  6. Refresh annually using Valuion to track progress and model option-pool decisions. For schemes requiring annual formal valuations (US ESOPs), continue with the qualified valuer in parallel.

Frequently asked

Questions about using Valuion for employee share schemes

As input into HMRC Company Share Valuation procedures for a straightforward cap table, potentially yes – but treat the Valuion output as supporting methodology evidence, not as the formal CSV submission. HMRC may either accept your self-valuation or challenge it, in which case you’ll need a qualified share valuer.
In many jurisdictions, yes – for a period of time after the priced round. In the US, a §409A based on a priced round is typically valid for 12 months unless a material event occurs. In the UK, HMRC typically accepts recent third-party investment as strong evidence of market value. A Valuion report can help sanity-check or model forward as the round ages.
In the UK, HMRC CSV for a straightforward small company: £1.5k–£4k. For complex cap tables: £5k–£15k. In the US, a §409A ranges from $2k (Carta-type automated) to $10k–$20k (full boutique engagement). Starting with a Valuion report typically reduces the qualified valuer’s scope.
Usually no – phantom schemes and unapproved options outside tax-advantaged frameworks have more flexibility on valuation. A Valuion Detailed report is often sufficient for these. You still want a defensible methodology, just not necessarily a regulated-practitioner sign-off.
Consequences vary by jurisdiction but are rarely minor. In the US, §409A failure can trigger 20% penalty tax plus interest on every affected employee. In the UK, EMI failure strips the tax-advantaged treatment and may trigger income tax rather than CGT on exercise. Getting the valuation right the first time is materially cheaper than fixing it later.

Related

Related pages

Disclaimer – jurisdictional requirements

Full jurisdictional limits detailed.

Detailed valuation report

The planning baseline before formal submission.

For accountants & advisors

How firms use Valuion across client portfolios.

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