The Treasury has published a call for evidence on potential improvements to SAYE and Share Incentive Plan (SIP) schemes.
On 5 June, the Treasury launched a call for evidence on the Save As You Earn (SAYE) and Share Incentive Plan (SIP) employee share schemes. The call, which had been trailed in the March Budget, is accompanied by an HMRC evaluation of both schemes, alongside the Company Share Option Scheme (CSOP). The CSOP is not part of the call for evidence, but following a Budget announcement that scheme was revised from the start of 2023/24. There was a doubling of the option limit to £60,000 and a relaxation of the definition of eligible shares.
Neither the SAYE nor SIP schemes have shown much growth in recent years, as the graphs below, based on the latest (2020/21) HMRC data, show:
The SAYE scheme has not been helped by the zero bonus returns on offer from 2014. Even with the new bonus provisions recently announced (please see our earlier Bulletin) the return on offer with the Bank (Base) Rate at 4.75% will be (from 18 August) just 1.75%, albeit tax-free.
Both schemes have also been victims of the dull performance of UK shares. For example, as at 6 June 2023, the FTSE 100 Index was 1.3% below its level of five years previous.
Comment
As we approach the next election, there is no sign that the Labour Party will be revising its 2019 manifesto proposal to transfer 10% of all company equity to employees over ten years.
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