UK workers waste 207 million in tax breaks by ignoring employee share plans
Find an IFA at www.unbiased.co.uk to ensure you get your fair shares
UK employees will miss out on a staggering 207 million of tax breaks this year, by failing to take advantage of employee share schemes,* reveals IFA Promotion, the organisation promoting the benefits of independent financial advice.
Currently there are only 6,427 companies running a tax-advantaged employee share scheme. Of these only 744 are listed, 55 are overseas companies and 4,563 are smaller unlisted companies.
The figure represents the amount of tax which could be saved if each of the estimated 600,000 staff currently in a savings related share option scheme invested just half the level of investment permitted under the Government’s Share Incentive Plans (1,500 each), launched in 2001.
The Share Incentive Plan, currently run by only 467 UK companies, is said to be one of the most tax advantaged all-employee share schemes ever to be introduced in the UK. The main features of this scheme are:
Employers can give up to 3,000 worth of “free shares” a year to employees free of tax and national insurance.
Employees can buy up to 1,500 of “partnership shares” from their pre-tax monthly salary or weekly wages, free of tax and National Insurance Contribution liability.
Employers can give employees up to two free “matching shares” for each partnership share the employees buy.
Employees who keep their shares in the scheme plan for five years pay no income tax or NIC on profits made on their sale.
Employees who take their shares out of the scheme plan after three years will pay income tax and NIC only on the initial value of the shares.
David Elms, Chief Executive of IFA Promotion, commented, “We all wish we paid a little less to the taxman and had a little more money in our wallets, yet a substantial amount of tax is being wasted by failing to take advantage of employee share schemes. By seeking expert independent advice you will know if a Share Incentive Plan is suitable for your circumstances and it could help you avoid squandering money.”
For a free copy of IFA Promotion’s guide to tax efficiency, together with details of local independent financial advisers who can talk through your tax options in detail, call the IFA Promotion freephone consumer hotline on 0800 085 3250 or visit www.unbiased.co.uk
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For further information please contact:
David Elms | Chloe Mann |
Chief Executive | Lansons Communications |
IFA Promotion | 020 7294 3681 |
020 7833 3131 |
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* TaxAction 2006 was produced for IFA Promotion by RAKM, and is partly based on a specially commissioned analysis of Inland Revenue data, combined with other sources such as the Family Resource Survey.
For expert comment or case studies from over 200 media-friendly IFAs, journalists should call IFA Promotion’s Media Services hotline on
020 7294 3682 or search online in ‘Media’ at www.unbiased.co.uk
1. Independent Financial Adviser Promotion
IFA Promotion was established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK and is sponsored by 31 leading financial institutions. In the past 12 months, over 530,000 consumers and businesses used IFA Promotion to find local independent financial advice.
IFA Promotion believes Independent financial advice should be:
Affordable. The option to take independent financial advice should be available, by right, to all- not just the wealthiest in society.
Convenient. IFAs should be available in the location of the consumer’s choice, wherever they live in the UK.
Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is not.
2. Independent Financial Adviser Promotion’s sponsors
Aberdeen Asset Management | Mortgage Express |
Abbey | National Savings & Investments |
AXA Life | NatWest Business Banking |
Bright Grey | New Star Investment Funds |
BUPA Health Services | Norwich Union Life |
Canada Life Ltd | Prudential |
The Children’s Mutual | Scottish Equitable Plc |
Clerical Medical Investment | Scottish Life |
Defaqto | Scottish Life International |
Friends Provident | Scottish Widows Plc |
GE Life | Skandia UK Group |
GMAC Residential Funding | Standard Life Assurance Company |
INVESCO Fund Managers Ltd | Unum Provident |
Legal & General | Webline Limited |
London Mortgage Company | Zurich Intermediary Group |
Lincoln Financial Group |
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