Income Tax (Earnings and Pensions) Act 2003 section 12A

The number of employees requirement

Section 12A sets out how to determine whether a company meets the employee number requirement, which is that the full-time equivalent employee count must be below 250.

• A single company must have a full-time equivalent employee number of less than 250
• A parent company must aggregate its own full-time equivalent employee number with those of each qualifying subsidiary, and the total must be less than 250
• The full-time equivalent figure is calculated by counting full-time employees and adding a just and reasonable fraction for each part-time employee
• Directors count as employees, but individuals on maternity, paternity, shared parental or parental bereavement leave, and students on vocational training, are excluded