{"id":127402,"date":"2024-11-13T00:00:00","date_gmt":"2024-11-13T00:00:00","guid":{"rendered":"https:\/\/gs:8890\/academy\/guide-to-creating-a-sharesave-scheme\/"},"modified":"2020-01-31T00:00:00","modified_gmt":"2020-01-31T00:00:00","slug":"guide-to-creating-a-sharesave-scheme","status":"publish","type":"post","link":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/insights\/guide-to-creating-a-sharesave-scheme\/","title":{"rendered":"UK SAYE scheme rules & design \u2013 checklist 2022"},"content":{"rendered":"

There’re currently around 500 UK companies offering Sharesave schemes, so it is clearly an attractive way to save money \u2013 both for the employee and for the employer.<\/p>\n

If you\u2019re considering launching an employee Sharesave scheme to your UK employees, then this checklist is going to explain the UK SAYE scheme rules in plain English and help you customise your plan to best suit your company.<\/p>\n

Understanding UK SAYE<\/b><\/h2>\n

A Sharesave scheme (also known as Save-as-you-earn, or SAYE) is a tax-efficient savings plan. Each month, participants contribute a fixed amount of their net salary into a savings pot for the length of the plan. When the plan ends, employees can use their savings pot to purchase shares at a price that was set initially or simply take back all their savings.<\/p>\n

For participants, it\u2019s almost a no-risk scheme and can help build wealth in a tax-efficient way.<\/p>\n

As an employer, it motivates employees to work harder to grow the business together. Check out our\u00a0complete guide to Sharesave<\/a>\u00a0to learn more about how it works and its benefits. (NOTE: an Irish SAYE plan is slightly different from the UK plan. Check out the\u00a0Irish SAYE plan<\/u><\/a>\u00a0here.)<\/p>\n

Checklist for setting up scheme rules for your UK SAYE plan<\/b><\/h2>\n
    \n
  1. Check Eligibility<\/strong><\/li>\n
  2. Key details:\u00a0<\/strong>the length of the scheme, eligible participants, exercise price, the range of participants\u2019 contributions<\/li>\n
  3. Other details or rules:\u00a0<\/strong>invitation period, exercise period, etc<\/li>\n
  4. Scheme approval<\/strong><\/li>\n
  5. Registration with HMRC<\/strong><\/li>\n
  6. Scheme management & administration<\/strong><\/li>\n<\/ol>\n

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    \n\t\t\t\t\t\tAt Global Shares, we cover everything, from participant enrolment to trading, compliance, tax and everything in between. Need extra help with sharesave rules, documentation and registration? Our advisor team is happy to help. Talk to us today!
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    \n\t\t\t\t\t\tContact Us\t\t\t\t\t<\/a><\/p>\n

    1. Check Eligibility<\/h3>\n

    To offer\u00a0SAYE, the\u00a0Sharesave scheme rules<\/a>\u00a0say that the scheme shares must be:
    \u2013 Listed on a\u00a0    recognized stock exchange<\/a>, or
    \u2013 In a company which is under the control of a listed company, or
    \u2013 In a company which is subject to an employee-ownership trust<\/p>\n

    2. Key Details<\/h3>\n

    A. The length of the scheme<\/u><\/strong><\/p>\n

    Options for business:<\/strong>\u00a03 years or 5 years<\/a><\/p>\n

    While it might be tempting to go for a 5-year plan to keep your employees longer, your plan won\u2019t be appealing to them. These days, the average young employees switch jobs every 2.4 years.<\/p>\n

    If your plan is 3 years long, then it\u2019s more appealing to employees, while potentially increasing your average worker\u2019s stay from 2 to 3 years.<\/p>\n

    B. Eligible participants<\/u><\/strong><\/p>\n

    Options for business<\/strong>: To include or not newer employees (fewer than 5 years\u2019 service)<\/p>\n

    Sharesave scheme is an all-employee scheme that must be open to all employees and full-time directors with 5 years\u2019 service or more during which employees and directors must have been continuously employed. But, you can set up a minimum service requirement (not more than 5 years<\/a>) for your plan.<\/p>\n

    C. Exercise Price<\/u><\/strong><\/p>\n

    Options for business<\/strong>: Up to 20% off the market value<\/a> at the time the option is granted<\/p>\n

    The Exercise price is the price paid by participants to purchase the shares when the scheme ends.<\/p>\n

    It\u2019s common to see companies offer the maximum discount to make the exercise price low to boost enrolment rates. Also, employers can claim corporation tax relief on the difference between the market value of the shares at the date of exercise and the exercise price.<\/p>\n

    D. The range of participants\u2019 contributions<\/u><\/strong><\/p>\n

    Options for business<\/strong>: Between \u00a35 and  \u00a3500<\/a><\/p>\n

    Based on the SAYE scheme rules, it can\u2019t be lower than \u00a35, or higher than \u00a3500, but companies often set their own limits within these.<\/p>\n

    This decision comes down to how many shares you want to distribute. But again, you also need to consider how your rules impact the attractiveness of your Sharesave scheme.<\/p>\n

    It\u2019s worth noting that the maximum limit applies across all the plans a participant is enrolled in. <\/p>\n

    3. Other SAYE scheme rules \/ details to consider<\/h3>\n

    A. Invitation period<\/strong>: When you launch your scheme, you\u2019ll need to announce your plan and give employees a reasonable period of time to enrol (i.e. invitation period). A Sharesave invitation usually closes in a few weeks.<\/p>\n

    B. Exercise period<\/strong>: When the scheme ends, participants will be allowed to exercise (purchase) their SAYE share options within the exercising period. So, you should also consider the length of the exercise period. Companies usually provide employees with 6 months starting from the end date to exercise the options.<\/p>\n

    C. Allowed suspending the contract?<\/strong> Usually yes.<\/p>\n

    D. Allowed changing the monthly contribution?<\/strong> Usually no.<\/p>\n

    E. Allowed exercising the shares if participants leave the company?<\/strong> Usually no but they will be able to get back all the contributions that have been saved in the scheme.<\/p>\n

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    \n\t\t\t\t\t\tGet stuck in your scheme planning? Talk to us today!
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    \n\t\t\t\t\t\tContact Us\t\t\t\t\t<\/a><\/p>\n

    4. Scheme approval<\/h3>\n

    Once you have the Sharesave rules and details sorted, you\u2019ll need to get approval. A new Sharesave Scheme means you\u2019re issuing new shares, so it only makes sense that your Board needs to approve it. You\u2019ll need a lawyer for this part, as there are specific guidelines you need to follow.<\/p>\n

    5. Registration with HMRC<\/h3>\n

    You can do it via the\u00a0HMRC\u2019s Online Service Portal<\/a>. (Government Gateway user ID and password are required).\u00a0The scheme should be registered by 6 July 2022 if it was set up in 2021\/22.<\/p>\n

    6. Scheme management & administration<\/h3>\n

    Now you need to figure out the logistics of the Sharesave plan.<\/p>\n

    Remember participants\u2019 contribution amount is deducted directly from their paycheck? Your payroll department is going to have a massive new responsibility \u2013 the payroll deductions.<\/p>\n

    Not only that but there is a massive amount of employee data that now needs to be handled and processed \u2013 who is participating, how much they\u2019re contributing, what their status is, etc. And it needs to be handled accurately, rapidly and in accordance with GDPR.<\/p>\n

    Have we mentioned the tax scenarios that need to be addressed? Owning shares in a company affects your participants\u2019 tax implications. They need the proper paperwork and documentation in a timely manner.<\/p>\n

    If all of this is starting to make your head spin, don\u2019t worry. There\u2019s a smart, automated platform with a team of experienced professionals ready to support you and your employees.<\/p>\n

    Let Global Shares administer your SAYE scheme<\/b><\/h2>\n

    Global Shares has been managing equity compensation plans of all different types, shapes and sizes for over 15 years now.<\/p>\n

    Our Implementation team will take you through the process, making sure that you\u2019re getting the most out of your Sharesave plan with the least amount of hassle and resource drain from your side.<\/p>\n

    From there, our Operations team will handle the day-to-day maintenance of the plan, from financial reporting to tax implications, and more.<\/p>\n

    If you\u2019d like to see for yourself how our share plan administration software can help your company, book a one-on-one, no-obligation consultation today and we\u2019ll demonstrate our award-winning software.<\/p>\n

    \t\t\t
    \n\t\t\t\t\t\t\t\t\tRequest a Demo
    \n\t\t\t<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    There’re currently around 500 UK companies offering Sharesave schemes, so it is clearly an attractive way to save money \u2013 both for the employee and for the employer. If you\u2019re considering launching an employee Sharesave scheme to your UK employees, then this checklist is going to explain the UK SAYE scheme rules in plain English […]<\/p>\n","protected":false},"author":3,"featured_media":127403,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[553,553],"tags":[554,699,701],"class_list":["post-127402","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employee-share-stock-plans-ie","tag-see-all-ie","tag-saye-ie","tag-sharesave-ie"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/posts\/127402","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/comments?post=127402"}],"version-history":[{"count":0,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/posts\/127402\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/media\/127403"}],"wp:attachment":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/media?parent=127402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/categories?post=127402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/tags?post=127402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}