Further to the Chancellor’s announcement in the 2023 Spring Budget (as set out in our previous blog post here), HM Treasury has now launched its Call for Evidence on the UK’s two all-employee tax-advantaged share schemes – the Save As You Earn (“SAYE” or “Sharesave“) and the Share Incentive Plan (“SIP“). The aim of the Call for Evidence is to gather evidence on usage of the schemes and seek input on whether they are effective in achieving their policy objectives. The government will then “consider opportunities to improve and simplify the schemes”.

The Call for Evidence in particular seeks views on the following:

  • the effectiveness and suitability of the schemes and whether they are fulfilling their policy objectives;
  • current usage and participation and whether there are barriers to participating in the schemes;
  • whether the schemes’ rules are simple and clear and whether they offer enough flexibility to meet individual firms’ needs;
  • whether the schemes suitably incentivise share ownership for lower income earners; and
  • what other performance incentives businesses offer their employees and how these compare with SAYE and SIP.

The generous tax benefits available under the SAYE and SIP schemes have been part of successive governments’ policies to promote employees building stakes in the businesses they work in and to align the interests of employees and shareholders. Whilst wholesale reform of the schemes is unlikely to result from the Call for Evidence, the topics raised by the government indicate a desire to simplify both regimes and consider changes that could be made to encourage more lower-paid employees to participate in the schemes. The Call for Evidence follows hot on the heels of the implementation of changes to the two other UK tax-advantaged employee share schemes (EMI and CSOP), which were again aimed at simplifying operation and increasing attractiveness (see our blog posts here and here). HMRC has also recently re-introduced interest payments on SAYE savings, as described in our previous blog post.

The Call for Evidence is open for responses from employers, representative bodies and other interested parties until 25 August 2023. Industry bodies and focus groups are likely to coordinate responses to the consultation over the coming weeks. Any responses should be submitted via the online survey here.