Save as you earn (SAYE) schemes ― an overview

Produced by Tolley in association with

Employment Tax

Guidance

Introduced in 1980, these are the oldest HMRC tax-advantaged share schemes still in operation. The legislation originally created savings-related share option schemes, but they are also known as save as you earn (SAYE) schemes or share save schemes. Although the name and administrative process has changed and the legislation rewritten, the basic structure and effect of the scheme has remained unchanged.

SAYE is an all-employee scheme and therefore, within certain limits, rights must be offered on similar terms to everybody working for the company.

In an SAYE scheme, employees will allow a proportion of their salaries to be paid to a bank or building society SAYE account on a monthly basis.

This will be accumulated over a three or five-year period with a tax-free bonus at the end of the savings period as a small reward for keeping up the payments. The savings provider should be offering the equivalent to interest on the cash invested; although in recent low-interest times, the rates fixed by the Treasury were 0% for a

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Ken Moody

Tax Consultant at KM Tax Consultant

Ken Moody CTA (Fellow), ATT has worked in tax for over 40 years. He qualified as an Associate of the Chartered Institute of Taxation (CIOT) while working for a local firm of Chartered Accountants in his home town Sheffield. Ken then joined a top 30 London firm, managing the tax affairs of a SE-quoted group of companies. As lead tax adviser, this involved complex technical negotiations with HMRC, briefing and meeting with Tax Counsel, group tax planning and advice on corporate transactions. Following a takeover, Ken took on a similar role in Saffery Champness' London office. Since 1995, Ken has worked for firms in the North of England and Scotland, in mainly advisory roles, focussing on the holistic tax affairs of owner-managed businesses (OMBs) and their proprietors. Ken now works as an independent tax consultant advising a number of professional firms of accountants around the North West, where he is based, but also offering nationwide support. Still with an OMB focus, Ken advises across a broad range of UK direct tax issues. Ken's writing career began with articles in Taxation and Tax Journal from about 2000 onwards and in writing in-house tax publications for DTE in Bury, as part of his role as Senior Tax Manager. He has since written numerous articles for professional magazines and other publications. Ken was awarded the Fellowship of the CIOT in 2011 for his work "Employment-Related Securities and Unlisted Companies".

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