Employment income: exemption for suggestion scheme awards: introduction
Section 321 ITEPA 2003
In general, an award made by an employer to an employee under the terms of a staff suggestion scheme is taxable as earnings within Section 62 ITEPA 2003 (see EIM00520) or as a benefit within Section 203 (see EIM21001 onwards).
For 2002/03 and earlier years, suggestion scheme awards were exempt from tax if they satisfied the conditions in Extra-Statutory Concession A57 (see SE06600).
For 2003/04 onwards, the concession was replaced by the statutory exemption in Section 321 ITEPA 2003. The conditions for exemption remain much as they were under the terms of the concession, but there are more detailed rules that apply when an employer makes more than one award for the same suggestion. The guidance on Section 321 is arranged as follows:
|EIM06610||Conditions for exemption|
|EIM06620||The permitted maximum: encouragement awards|
|EIM06630||The permitted maximum: financial benefit awards|
|EIM06640||Two or more awards for same suggestion on same occasion|
|EIM06650||Two or more awards for same suggestion on different occasions|
|EIM06660||Employee making more than one successful suggestion|
|EIM06670||Employer using scheme to make non-qualifying awards|