Have you heard of an encouragement award?

February 1, 2022

Do you have a staff suggestion scheme?

Did you know that you can reward your staff for making suggestions?

If you have a staff suggestion scheme, then you can reward your staff for making the suggestions and not only will they love you for giving them a reward but they’ll also love you because it’s tax free. And let us tell you that tax free money is hard to come by. It’s a win, win situation. Your staff will be encouraged to make suggestions because they get the tax free rewards and you get suggestions on how to better your business. Happy days 😊  

Here comes the technical bit from the HMRC website in our friendly jargon free way

The scheme has got to be open to all employees with the same terms. No favourites allowed. If you do have a couple of offices you can just open it to employees in a particular building if that works better for you. An example of this is a scheme which is open to all the employees in a particular building, or in a particular geographical area.

The suggestion must relate to the activities carried on by the employer. This is common sense. Why would you make a suggestion which is going to benefit someone else and ask your employer to give you money. It’s one of those rules which don’t need to be in but HMRC like to point out just to avoid any confusion which was never there!

If you’re expected to do a task and have a brilliant idea on how to make it easier than what’s expected, that you can implement that without asking for a reward. However, if you suggest something which isn’t part of your job but will make things run smoother within the company, then you can get some cash

And finally, the suggestion was not made at a meeting held for the purpose of proposing suggestions. So don’t hold staff suggestion meetings as no one is going to give you one

This award is called an encouragement award and must not exceed £25. There’s a lot of rules for £25 but if you have somebody who is full to the brim of ideas, then why not maximise them!