UK - Employees are missing out on at least £158m of tax breaks by not taking advantage of share schemes, IFA Promotion claims.
The organisation, which promotes the benefits of independent financial advice, claims savings are being missed because of a lack of awareness of the government’s Share Incentive Plan.
The plan - launched in 2001 - is currently run by 7796 companies and offers generous benefits to employees investing in their own companies.
Employers can give up to £3000 of “free shares” a year to employees free of tax and National Insurance, with empl oyees given the option to buy up to £1500 of ìpartnership sharesî from their pre-tax monthly salary.
But uptake for the profit share scheme is low and IFA Promotions claimed the £158m of missed tax savings was just the “tip of the iceberg”.
It said this represented the amount of tax which could be saved if all 750,000 staff currently in a Share Incentive Plan invested just half of the £1500 allowed by the government.
IFA Promotion chief executive David Elms said that despite the Inland Revenue’s attempts to raise awareness of these schemes, a substantial amount of tax was being “wasted” by employees not taking advantage of them.
He said: “It may not always be appropriate for people to invest their maximum allowance in a single companyís shares. But by seeking expert independent advice they will know if a Share Incentive Plan is suitable for their circumstances and could help avoid giving the taxman more than is needed.”
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