Save as you earn schemes

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

What is a save as you earn (SAYE) scheme?

Save as you earn (SAYE) schemes are savings-related share option schemes that provide directors and employees with the option to buy a specific amount of shares in their employing company at a future date, whilst obtaining certain exemptions from income tax.

These schemes include contractual savings arrangements to which the participant contributes a fixed amount of salary at regular intervals over either a three-year or five-year contract period. These SAYE savings arrangements are self-certified by the employing company as meeting the relevant conditions.

Under the savings contract, the participant agrees to pay a fixed regular monthly sum of between £5 and £500 over the contract period. Contributions are normally made by a deduction from pay.

At the end of the contract period, known as the ‘bonus date’, the participant is entitled to an amount of money. This amount is the total contributions made and may include a tax-free bonus element (if the bonus rate is more than 0%), which may then be used to buy a number of

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Enterprise investment scheme tax relief

Enterprise investment scheme tax reliefOverview of EIS tax reliefsThe enterprise investment scheme (EIS) offers significant tax reliefs to encourage individuals to invest money in qualifying shares issued by qualifying unquoted companies. The scheme is designed to encourage investment in small,

14 Jul 2020 11:36 | Produced by Tolley Read more

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more

Class 1 v Class 1A

Class 1 v Class 1AClass 1 and Class 1AClass 1 and Class 1A are the categories of NIC that can be charged on expenses reimbursed and benefits provided to employees. These classes are mutually exclusive. A benefit cannot be subject to both Class 1 and Class 1A NIC. Three requirements must be met

Save as you earn schemes

Save as you earn schemes