Low bonus rates were making SAYE schemes less attractive, the OTS said in March
The bonus rate for three, five and seven year SAYE share option schemes is nil with effect from 1 August 2012, HMRC announced.
Employers saw real benefits from the government-approved share schemes, the Office of Tax Simplification reported in March, citing employees’ ‘greater commitment’. But the OTS noted that one of the frequent comments at its roadshows was that the bonus rates offered under SAYE contracts were ‘out of line’ with other fixed interest rates offered by banks and other financial institutions. It was felt that ‘this was making SAYE less attractive to employees who could get a better rate elsewhere’.
The bonus rate was reduced to nil for three year contracts from 12 August 2011 and for five year contracts from 23 September 2011, when the rate for seven year contracts was reduced to the equivalent of 1.6 monthly payments (or 0.58%). Details of earlier rates are set out on the HMRC website.
The bonus rate for a scheme is set when the savings contract is made, and is not affected by subsequent changes.
The government is consulting on self-certification for SAYE schemes. Guidance on the existing rules is available in HMRC’s Employee Share Schemes User Manual at ESSUM30000.
Low bonus rates were making SAYE schemes less attractive, the OTS said in March
The bonus rate for three, five and seven year SAYE share option schemes is nil with effect from 1 August 2012, HMRC announced.
Employers saw real benefits from the government-approved share schemes, the Office of Tax Simplification reported in March, citing employees’ ‘greater commitment’. But the OTS noted that one of the frequent comments at its roadshows was that the bonus rates offered under SAYE contracts were ‘out of line’ with other fixed interest rates offered by banks and other financial institutions. It was felt that ‘this was making SAYE less attractive to employees who could get a better rate elsewhere’.
The bonus rate was reduced to nil for three year contracts from 12 August 2011 and for five year contracts from 23 September 2011, when the rate for seven year contracts was reduced to the equivalent of 1.6 monthly payments (or 0.58%). Details of earlier rates are set out on the HMRC website.
The bonus rate for a scheme is set when the savings contract is made, and is not affected by subsequent changes.
The government is consulting on self-certification for SAYE schemes. Guidance on the existing rules is available in HMRC’s Employee Share Schemes User Manual at ESSUM30000.
