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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: example

Section 332(3) ITEPA 2003

The suggestion maximum for a particular suggestion is £4,000. The employer makes two awards to the employee who made the suggestion, as follows:

£2,500 on 31 March 2004
£2,500 on 30 September 2004.

The suggestion scheme satisfies all the conditions in Section 321 ITEPA 2003 (see EIM06610).

2003/04: the award made in 2003/04 (£2,500) is less than the suggestion maximum (£4,000) and so is wholly exempt. The balance of the suggestion maximum (£4,000- £2,500 = £1,500) is available to set against any later award in respect of the same suggestion.

2004/05: the award made in 2004/05 (£2,500) is more than the balance of the suggestion maximum (£1,500). The difference (£1,000) is taxable as employment income in 2004/05.
See also example EIM06652.