Documents for Business

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Introduction to this document

Staff suggestion scheme rules

You might want to reward your employees for certain ideas that contribute to the success of your business. Previously by concession, this is now a statutory exemption. However, there are conditions you’ll have to meet.

Financially beneficial

A little-known way of giving employees tax and NI free cash is through a staff suggestion scheme. The scheme needs to be formally set up, but that doesn’t take much doing. You tell the staff that they will receive a small payment in return for ideas that may help the business. A really good idea that is taken up by the company will get a larger reward. Write down the amounts you plan to pay, and how you would like the ideas to be put forward. Pin these Staff Suggestion Scheme Rules to the office notice board so everyone can see them, and you are all set to start the suggestion scheme.

You can pay up to £25 for any suggestion but if it is implemented and likely to financially benefit the company, you can pay out the lower of: £5,000; and 50% of the expected financial benefit in the first year (or 10% of the expected financial benefit over five years if greater).