Marks and Spencer streamlines share plan system to account for new tax rate

Marks and Spencer has streamlined its employee share plan system to make sure that about 400 staff who are affected by the new 50% income tax rate do not end up paying too much tax.

Ann Govier, manager of employee share schemes and senior remuneration at M&S, said: “Some employees would fall into the 40% tax [bracket] and some into 50%. Because it is not just salary, it is also benefits, car payments and all of those things which have to be taken into account, we needed to make sure we withheld the right amounts.”

To overcome this, the retailer worked with Killik Employee Services to devise an automated system so when staff want shares released to them, the correct tax rates are applied.

Killik holds all the data on earnings and tax codes for each employee, as well as the value of the shares. The system then calculates whether 40%, 50% or a blended tax rate should apply.