Share incentive plans ― an overview

Produced by Tolley in association with

Employment Tax

Guidance

Update: At Spring Budget 2023, the government announced that it would launch a call for evidence on the save as you earn (SAYE) and share incentive plan (SIP) employee share schemes. The government will use the call for evidence to consider opportunities to improve and simplify the scheme.

Link to the consultation is found here, and closes on 25 August 2023.

Introduction

Share incentive plans (SIPs) were originally known as ‘All Employee Share Ownership Plans’ and were first introduced over 20 years ago. They are one of four tax-advantaged employee share schemes currently available in the UK. Under a SIP, employees can buy shares in their employing company from their gross salary whilst the employer can also provide them with matching shares at no extra cost to the employee. The shares are held in a separate SIP trust whilst they reside in the SIP plan. The legislation governing SIPs is found in ITEPA 2003 Schedule 2, and HMRC often refer to this type of plan as a Schedule

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Helen Wood

, Employment Tax

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