EIM06642 - Employment income: exemption for suggestion scheme awards: two or more awards for same suggestion on same occasion: example
Section 322(2) ITEPA 2003
Three employees, C, D and E, make a joint suggestion under a
staff suggestion scheme which satisfies the conditions in Section
321 ITEPA 2003 (see
EIM06610). The suggestion is adopted,
and their employer decides to award £2,500 to C, £5,000
to D and £2,500 to E. The suggestion maximum for the award is
£5,000 (see
EIM06630).
For employee C, the permitted maximum is:
| £2,500 |
x | £5,000 |
= | £1,250 |
| £2,500 + £5,000 + £2,500 |
|
|
|
|
This is less than C’s award of £2,500, so C is
taxed on (£2,500 - £1,250) = £1,250
For employee D, the permitted maximum is:
| £5,000 |
x | £5,000 |
= | £2,500 |
| £2,500 + £5,000 + £2,500 |
|
|
|
|
This is less than D’s award of £5 000, so D is
taxed on (£5 000 - £2 500) = £2 500
The figures for employee E are the same as for employee C.
As the suggestion maximum for this suggestion has been
completely used up, any later award in respect of the same
suggestion must be taxed in full (see
EIM06650).
