Suggestion schemes

Produced by Tolley in association with

Employment Tax

Guidance

An employee may be encouraged to share ideas with their employer that might benefit the business. These ideas may be posted in a staff suggestion box, posted on the company intranet or any other suitable method of delivery as agreed with the employer. Any payment made by an employer in recognition of the employee’s idea would ordinarily be taxable. However, a specific tax exemption exists for suggestion awards, subject to certain conditions.

What constitutes a tax exempt suggestion scheme?

Awards made by an employer to an employee are exempt from income tax, provided that all the following conditions are met:

•
the employer formally adopts a suggestion scheme that is open to all employees in general on equal terms or to a particular group of them. A scheme which is open to all the employees in a particular workplace or geographical area satisfies this condition
•
the suggestion relates to the activities carried on by the employer
•
the employee could not reasonably have been expected to put forward the suggestion in the course of their employment duties,

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Paul Tew

Writer and advisor at Paywatch

Paul Tew is a freelance adviser, primarily in the areas of pay, personal taxation and remuneration planning. A frequent contributor to technical journals on pay and benefits issues, having written for the "In Business" section of the Times. Paul continues to supply articles for various recognised professional publications including Pay and Benefits magazine, Taxation magazine and Company's Secretary's Review. Paul also has had several loose leaf and bound books published on a variety of subject matter including PAYE, NIC, Sickness and Maternity Pay. Paul has written and presented training courses as well as headed up payroll and employment help desks and acted as an assessor for recognised Payroll/HR qualifications. Paul previously worked in the healthcare and oil sectors managing Pay and benefit services, so has many years of experience in dealing with PAYE and employment compliance issues across a broad range of industries and organisations.

Popular Articles

Trusts and Inheritance Tax

Transfer of assets to beneficiaries ― legal, administration and tax issues

Transfer of assets to beneficiaries ― legal, administration and tax issuesThis guidance note outlines how assets are transferred to beneficiaries and the tax consequences that flow from the transfer. Whether a payment is income or capital is discussed in the Payments to trust beneficiaries guidance

14 Jul 2020 13:52 | Produced by Tolley Read more

Owner-Managed Businesses

Special rate pool and long life assets

Special rate pool and long life assetsSpecial rate poolExpenditure on some types of plant or machinery must, if neither annual investment allowance (AIA) nor first year allowances (FYAs) are available, be allocated to a ‘special rate pool’. Expenditure to be allocated to the special rate pool

14 Jul 2020 13:41 | Produced by Tolley Read more

Employment Tax

Fuel-related payments / mileage payments

Fuel-related payments / mileage paymentsIntroductionMost employers will make payments to employees in relation to business travel. Among the most common payments in relation to business travel are fuel and mileage payments. If an employer does not reimburse these amounts, then the employee will be

14 Jul 2020 11:46 | Produced by Tolley in association with Philip Rutherford Read more

UU��ֱ��