Last night at the IFS/Proshare Annual Awards dinner David Gauke gave the clearest hint yet that the Government was considering raising the limits on approved plans.
The SAYE limit of £250 has been the same for over 20 years and the SIP limits have remained the same since plans started in 2001. If the Government does lift the thresholds, this could have a major effect on the popularity of share schemes on the UK. The raising of the limits would attract many more companies to put in tax approved plans which give higher net rewards to employees. Coupled with the simplification recommendations which the Office of Tax Simplification (OTS) proposed and the government implemented, this could make share plans the norm amongst British companies.
The Government is to be commended for maintaining tax advantaged share plans in a time of fiscal austerity when many countries in continental Europe were abolishing them. However to achieve greater share ownership amongst ordinary employees, the Government should seize the opportunity to increase the contributions that employees can make.
