05 June 2023

The Employment Related Securities Bulletin 51 has been published by HM Revenue and Customs (HMRC). The guidance outlines the updated Save As You Earn (SAYE) bonus rate mechanism.

Below are the key points covered in the HMRC guidance:

  • HMRC has updated its mechanism for calculating the bonus rates for SAYE participants. The mechanism will apply from 18 August 2023 and is expected to result in a bonus being provided to new participants for the first time since 2014
  • this update follows a review launched in June 2022 to consider options to simplify the mechanism. The bonus rates will now be calculated with reference to the Bank of England bank rate (also known as the ‘base rate’), providing greater certainty and transparency for users
  • details of how the bonus rate is calculated are set out in the bonus rates automatic mechanism. The new bonus rates automatic mechanism will come into effect from 18 August 2023 for new invitations to the scheme, with future changes in the bank rate determining bonus rates going forwards
  • to support the new mechanism, HMRC will record the bonus rates, early leaver rate and the effective date of any change in ‘Change in bonus rates for Save As You Earn (SAYE) Share Option Schemes’. For now, the current rates have been provided, but HMRC is expecting to add the rate which will apply from 18 August 2023 following the confirmation of the bank rate in early August 2023
  • HMRC have issued a new ‘Specimen Save As You Earn (SAYE) prospectus’ to give effect to the mechanism. This prospectus will not require replacement to update the bonus rate in future.

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