Tapestry Alert: UK - HM Treasury publishes SAYE and SIP Call for Evidence

Tapestry Newsletters

6 June 2023

As announced in the Spring Budget 2023, the UK government (HM Treasury) has now launched its “Call for Evidence” on the tax advantaged share schemes Save As You Earn (SAYE) and the Share Incentive Plan (SIP). The Call for Evidence can be found here.

This follows the publication of an evaluation by London Economics (as commissioned by HMRC) of three tax-advantaged employee share schemes (being Company Share Option Plan (CSOP), SIP and SAYE). The aim of the evaluation was to provide a quantitative, qualitative and econometric analysis of these plans to understand how they are used and what impact they have on firms and employees. This can be found here.

What does the government want to know?

In the Call for Evidence, the government is seeking views on whether SAYE and SIP meet their policy objectives and whether there are ways to simplify and improve the plans.

In particular, the government is looking at usage of and participation in the plans, the level of flexibility that the plans can offer and how the plans compare to other incentives being offered. There are also questions on lower income earners and what barriers there may be for their participation.

The government has also asked for details on why businesses have chosen to implement (or not) a SIP or SAYE and their experience of doing so. The government also welcomes views on how businesses find operating a SIP or SAYE from an administrative perspective and what improvements could be made.  

What are the policy objectives of SIP and SAYE?

The Call for Evidence focuses on whether SIP and SAYE are meeting their ‘policy objectives’. These objectives include:

  • incentivising employees, including/especially those who are lower income earners;
  • supporting recruitment and retention;
  • promoting employee ownership;
  • creating a strong link between production of capital and labour;
  • aligning shareholder and employee interests;
  • rewarding hard work; and
  • incentivising savings and investing habits in employees and encouraging financial planning.

How and when to respond?

Responses should be sent by 25 August 2023 using the online survey which can be found here.

Tapestry comment

There have long been calls to improve and simplify SIP and SAYE. Industry bodies like ProShare have led the drive to ensure that the government recognises that certain requirements of the plans might now be outdated and these plans are not fully meeting their objectives. This Call for Evidence is a fantastic opportunity to provide views and recommendations on much needed improvements. Tapestry can think of a number of areas where these plans might be made more fit for purpose to focus on increased participation and utility. We expect the focus of responses to be on improving eligibility rules, offering more flexibility and shortening the length of any holding/exercise period, as well as securing the tax advantages these plans can offer.

This is a rare chance to really have a say in the objectives and design of these hugely important plans and Tapestry will take it with both hands! We will be submitting a response with our thoughts and strongly encourage all businesses to do the same. The more responses that are sent in, the more likely the government will see the need to make changes. 

If you have any questions, ideas or views on the Call for Evidence, please do contact us.

Chris Fallon and Becky Moore

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