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Chapter ETASSUM44290

Document Cited in Related
Vincent
Published date26 August 2015
Record NumberETASSUM44290
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

If the scheme rules provide for subsequent variation or waiver of performance conditions, there must also be objective criteria which limit the directors’ discretion to do so. This means including objective machinery directing when and to what extent the performance targets can be amended.

The provisions in the Burton Group scheme (ETASSUM47250) were acceptable because targets could only be varied:

  • when events happened which caused the directors to consider that a different condition would be a fairer measure of the performance of the job-holder,
  • to the extent that the directors reasonably considered would result in the condition being less difficult to satisfy than it would have been without such amendment.

But there will be other forms of objective machinery which are acceptable. For example, a requirement that the amended conditions should be no more nor less difficult to satisfy (i.e. the effect must be neutral) would be just as objective.

Some scheme rules may include provision for setting additional conditions, but be silent on whether they can be amended or waived...

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