ARTICLE · 05 JUNE 2023

HMRC Updates SAYE Bonus Mechanism

Herbert Smith Freehills Kramer LLP

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HMRC has updated the mechanism for calculating bonus rates for participants in Save As You Earn (SAYE or "Sharesave") schemes, as announced in HMRC Employment Related Securities Bulletin 51.

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Herbert Smith Freehills

HMRC has updated the mechanism for calculating bonus rates for participants in Save As You Earn (SAYE or "Sharesave") schemes, as announced in HMRC Employment Related Securities Bulletin 51.

A new specimen SAYE prospectus and bonus rate mechanism will become effective from 18 August 2023 meaning that any new savings arrangements (or "savings contracts") entered into after that date will have a bonus attached. Bonus rates will effectively be determined by reference to an interest rate set at 3% below the Bank of England base rate ("Bank Rate") up to a Bank Rate of 5%. A higher discount to the Bank Rate then applies such that the bonus rate caps out at an effective 3.5% rate should the Bank Rate reach 8% or more. The minimum bonus rate will be zero.

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