O Raxmas Tree wrote:My previous employer offered it, I dont know if every scheme is the same but I had a good experience with it. The way the scheme worked is you paid in for 6 months, up to 5% of your salary, this was pooled and then at the end of the 6 months the shares were purchased for 85% of the lowest price in that 6 months, so even if the stock jumped (due to your hard work) you got a good price for it. Once the shares were bought it was in my private shares account and I could do whatever I wanted with them. The 5% was also taken before tax so there was a saving made there as well, basically not paying tax on 5% of my earnings which is nice. I took part for about 18 months before I left the company, I chose to sell the shares when I left but I could have kept them if I wanted to. Selling them was as easy as entering my bank details and pressing sell, there was no messing around or anything.
You also had the option of taking your bonus or part of it in shares instead of as payroll, I never did this but it was a handy way to get even more shares if you wanted it.
You need to declare any earnings you make from the transaction so it can be taxed, but you only get taxed on the profit you made. So if you paid in £1000 but sold the shares for £1200 you get taxed on the £200 gain you made. Its a decent savings scheme if your company has solid reliable stock but there is the risk you lose everything as if the company goes down it takes your savings with it.
Like I said I had a good experience with it and its something I would take part in again if the oppertunity ever arose.
Shouldn't you only get taxed if on profits exceeding the allowance though? I don't think you need to pay any tax unless your profit from releasing shares exceeds something like £10,000.
I've been in a few share shave schemes at work and would generally recommend it, although it should be remembered that they all work differently so read up on the specifics of your scheme before making any decisions.
Generally it is in your employer's interest to make these things an attractive prospect for you as it's mutually beneficial - you get the option to gain some money and they get more people investing in their shares.