Q&As

Can an employee delay the payment of monthly save as you earn contributions as a result of the coronavirus (COVID-19) pandemic?

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Published on LexisPSL on 28/07/2020

The following Share Incentives Q&A provides comprehensive and up to date legal information covering:

  • Can an employee delay the payment of monthly save as you earn contributions as a result of the coronavirus (COVID-19) pandemic?

Can an employee delay the payment of monthly save as you earn contributions as a result of the coronavirus (COVID-19) pandemic?

In order to be granted a save as you earn (SAYE) option, the option holder must enter into an HMRC-certified savings arrangement. At the outset, the employee must select how much they intend to contribute from their monthly salary under the savings arrangement during the applicable savings period. Each monthly contribution cannot be more than the maximum individual limit which applies under the SAYE legislation (which is currently £500 per month) and the scheme cannot require a minimum contribution of more than £10 per month.

From the 1 September 2018, the terms of the SAYE prospectus allow an employee to delay the payment of monthly contributions, by up to 12 occasions in total, without causing the savings contract to be cancelled prematurely but if the participant fails to make a contribution on the due date for a thirteenth occasion the employee is treated as if they had given notice of intention to stop making contributions permanently. Employees with savings contracts that started before 1 September 2018 can also delay the payment by up to 12-monthly contributions in total. However, in the Employment Related Securities Bulletin 35 (June 2020), HMRC confirmed that it will allow contributions to be postponed for a longer period

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