Louise Haigh – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Louise Haigh on 2015-10-29.

To ask Mr Chancellor of the Exchequer, what steps he is taking to permit private equity-backed companies to offer tax-advantaged all employee share plans; and if he will make a statement.

Mr David Gauke

The tax-advantaged Save As You Earn (SAYE) and Share Incentive Plan (SIP) limits were significantly increased from April 2014. The increases the Government have made are reasonable, given the average monthly SAYE savings and the value of awards currently made to employees under SIP, and they represent the best use of resources. The Government will continue to keep the SAYE and SIP limits under review.

In addition to increasing the SAYE and SIP limits, the rules of the schemes were substantially reviewed and simplified following the recommendations made by the Office of Tax Simplification in March 2012. Last year, the requirement that these schemes must be approved by HM Revenue and Customs to qualify for favourable tax treatment was replaced by self-certification. Coupled with other changes to simplify some technical aspects of the rules, this will make these schemes more attractive to businesses and employees.

No data is collected and no estimates are made of the income levels of the participants in SAYE schemes.

Permitting private equity backed companies to offer all-employee tax advantaged schemes would be likely to involve significant changes to the rules of the schemes, and there would be a number of other factors to consider carefully, including the increased cost and complexity of any extension.