Increasing the save as you earn (SAYE) and share incentive plan (SIP) investment limits, which have not risen since the original incentive levels were set, would increase the schemes’ appeal to the highest earners, according to ICAEW.  

High earners are the main employees that companies want to incentivise. It would also make the schemes more cost-effective for employers.  

ICAEW’s Tax Faculty expressed this view in its response ICAEW REP 79/23 to HM Treasury’s call for evidence Non-discretionary tax advantaged share schemes, covering SAYE and SIP, published on 5 May.  

The response outlines other possible ways to increase take-up of SIP and SAYE, including: 

• Simpler administration. SIPs involve trusts and so are almost always associated with really big companies who have the in-house expertise to set up and operate the schemes. 
• Removing the penalty for early leavers. This would take account of research showing that the average tenure of employees is five years.   
• More nuance to requirements. The broad requirement to offer similar share rights to all employees also means that it is unlikely to be used by smaller companies that need a more tailored approach. 
• Linking bonuses to company performance. Consideration might be given to adapting the French offer of “intéressement et participation” under which bonuses are linked to company performance. This gives a closer connection between individual performance and company health.  

ICAEW’s Tax Faculty believes that SAYE and SIP are basically sound and continue to meet their original objectives.  

While the above recommendations may help to reverse the waning of employer and employee enthusiasm for the schemes, they have to be considered in the context of the changing nature of the UK’s labour market. The growth of the gig economy and zero-hours contracts, and increasingly transient employments under which the concept of a job for life has almost disappeared, result in a significant number of workers who will never be able to participate in either scheme in a meaningful way.