It's rumoured that HMRC are looking to scrap the staff suggestion scheme, no doubt due to it's potential for abuse. So if you want to take advantage of it, now would be a good time to do so before it's too late.

This scheme is specifically allowed and provided for in the legislation. It is very simple to operate and works as follows…

• Employees can be rewarded for making suggestions and such payments can be made without tax or NI being payable. You get tax relief on the payment through your accounts, just as you do with paying normal salaries.
  
  
• There is a maximum limit of £5000 that can be paid if a suggestion is implemented and the benefits recorded. There is no limit on the number of suggestions from each employee.
  
  
• The amount awarded must not exceed 50% of the expected net financial benefit in year 1 or 10% of the benefit over 5 years, whichever is the greater.
  
  
• Payments of up to £25 can be made for employees' suggestions as an encouragement. Employees can make as many suggestions as they want.
  
  
• The suggestion must be outside the scope of the employees' normal duties, so a production employee or director could suggest a sales idea for example.
  
  
• The scheme must be formally set up but no formal approval is needed form the Revenue.
  
  
• It must be open to all employees and not part of their contractual entitlement.

If you would like to take advantage of this suggestion please contact us for further advice. Any rewards for this suggestion are also gratefully received!

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