IFA Promotion, the promotion and lobby group for Independent Financial Advisers, has claimed that workers will miss out on tax savings of £285 million this year, in employee share schemes.
Only 435 UK companies run the share incentive plan, which allow staff to have up to £3,000 worth of shares a year and buy up to £1,500 of partnership shares from their pre-tax salaries, free of tax and national insurance.
IFA Promotion believe that if the estimated 865,000 people who are currently in a savings related share option scheme invested just half of the £1,500 investment permitted, the savings would be around £285 million.
Our view
This is a difficult call given that many employers may not actually want their employees to own a share in the business. For larger public limited companies these schemes are feasible and perhaps circa 400 plus companies is about right.