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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Employment income: exemption for suggestion scheme awards: two or more awards for same suggestion on same occasion: example

Section 322(2) ITEPA 2003

Two employees, A and B, make a joint suggestion under a staff suggestion scheme which satisfies the conditions in Section 321 ITEPA 2003 (see EIM06610).Their employer decides to award £2,000 to A and £1,000 to B. The employer calculates the suggestion maximum for the suggestion as £4,500 (see EIM06630).

For employee A, the permitted maximum is:

(£2,000 / (£2,000 + £1,000)) x £4,500 = £3,000      

This is more than £2,000, so A’s award is entirely exempt.

For employee B, the permitted maximum is:

(£1,000 / (£2,000 + £1,000)) x £4,500 = £1,500      

This is more than £1,000, so B’s award is entirely exempt.

As only £3,000 of the suggestion maximum has been used, the balance of £1,500 is available if the employer decides to make a later award in respect of the same suggestion (see EIM06650).

See also example EIM06642.