06 June 2023

The Employment Related Securities Bulletin 52 has been published by HM Revenue and Customs (HMRC). The guidance outlines the launch of the ‘Non-Discretionary Tax-Advantaged Share Schemes: Call for Evidence’.

At Spring Budget 2023, the government announced it would be launching a call for evidence on the Save As You Earn (SAYE) and the Share Incentive Plan (SIP). The Treasury now seeks views from businesses, representative organisations, and employees as well as anyone interested in the tax-advantaged employee share schemes or the wider tax system. The consultation published on 5 June 2023, seeks to improve the schemes and expand their use by making it easier for businesses to set them up and offer them out to staff. The consultation closes on 25 August 2023.

This also comes as a HMRC evaluation report shows that 81% of businesses say these schemes help boost their business, with almost three quarters of these saying it has helped them retain and recruit staff. 31% of businesses which are unaware of these schemes say they are too complicated to set up.

The two schemes being reviewed are:

  • Save As You Earn (SAYE) - this allows employees to buy discounted shares in their company if they save money each month for three to five years
  • Share Incentive Plan (SIP) - this allows companies to help their employees to purchase shares directly in their company or offer them as awards, tax free.

These schemes are one of the tools the government has to drive economic growth and the new call for evidence is designed to gather feedback on participation in both schemes, finding out how they can be improved and simplified. The government is particularly interested in understanding whether the schemes are attractive to lower income earners.

HMRC’s evaluation also shows 50% of companies which have set up a share scheme have done so to create a feeling of ownership among their staff, with other common reasons being to help retain staff and skilled employees, attract skilled employees and improve staff morale.

The Financial Secretary to the Treasury, Victoria Atkins said:

‘‘Employee share schemes are an effective way to boost motivation in workforces by giving people an extra stake in what they do – and they offer a boost for business.

Growing the economy is a priority for this government and one way to make this happen is by making these schemes as easy as possible to set up.’’

Read the full press release here.

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