On 1 January 20X1 the company obtained a contract in order to keep the factor y in work but had obtained it on a very tight profit margin. Liquidity was a problem and there was no prospect of offering staff a cash bonus. Instead, the company granted its 80 production employees share options for 1,000 shares each at £10 per share. There was a condition that they would only vest if they still remained in employment at 31 December 20X2. The options were then exercisable during the year ended 31 December 20X3. Each option had an estimated fair value of £6.5 at the grant date.

At 31 December 20X1:
The fair value of each option at 31 December 20X1 was £7.5.
4 employees had left.
It was estimated that 16 of the staff would have left by 31 December 20X2.
The share price had increased from £9 on 1 January 20X1 to £9.90.

Required:
Calculate the charge to the income statement for the year ended 31 December 20X1.