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Staff Suggestion Scheme

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How To Pay Your Staff Tax Free By Using The Staff Suggestion Scheme!

This scheme is specifically allowed and provided for in the legislation. It is very simple to operate and works as follows…

  • Employees can be rewarded for making suggestions that relate to your business activities, and where the conditions apply, the payments can be made without tax or NI being payable. You get tax relief on the payment through your accounts, just as you do with paying normal salaries.
  • If a suggestion is implemented and a real financial is expected to accrue, the employee can be paid the lower of; half the annual benefit expected in the short or medium term and £5000.
  • Payments of up to £25 can be made for employees' suggestions as an encouragement, whether or not the suggestion is implemented. Employees can make as many suggestions as they want.
  • The suggestion must be outside the scope of the employees' normal duties, so a production employee or director could suggest a sales idea for example.
  • The suggestion must not be made in a meeting held for the purpose of proposing suggestions.
  • The scheme must be formally set up but no formal approval is needed from HM Revenue & Customs.
  • It must be open to all employees and not be part of their contractual pay or benefits entitlements.

How We Can Help You

We can assist you in setting up a staff suggestion scheme and providing basic scheme rules.


About the Author

Jonathan Amponsah BSc FCCA is a UK Tax Expert and the founding partner of A M P Associates – A specialist firm of chartered certified accountants and tax advisers based in London and Surrey. Jonathan advises on a wide range of business and tax issues and he is recognized for his proactive and innovative approach to taxation.

Jonathan can be contacted on 0845 009 8845 or email:jonathan@ampassociates.co.uk


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Article Published/Sorted/Amended on Scopulus 2008-06-02 23:26:38 in Tax Articles

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