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HMRC internal manual

Employment Income Manual

Employment income: exemption for suggestion scheme awards: two or more awards for same suggestion on different occasions

Section 322(3) ITEPA 2003

EIM06640 explained how the exempt amount (the “suggestion maximum”) for a financial benefit award is apportioned when an employer makes two or more awards for the same suggestion on the same occasion. There are further rules for deciding how much is exempt from tax when two or more awards are made, for the same suggestion, at different times. This could happen if an employer made an initial award for a promising suggestion followed by a later award when the suggestion has been fully evaluated.

  • The basic rule is that the total amount qualifying for exemption in respect of a single suggestion must not exceed the suggestion maximum calculated in accordance with EIM06630.
  • The suggestion maximum is set against the earliest award(s) first, applying the rule in EIM06640 if awards were made to two or more people at the same time.
  • If the suggestion maximum is not completely used up against the first award, the balance can be set against any later award, and so on (see example EIM06651).
  • If a later award is made to two or more people at the same time, the balance of the suggestion maximum is apportioned between them as described in EIM06640 (see example EIM06652).