Income Tax (Earnings and Pensions) Act 2003 section 38

Suggestion awards

Section 38 deals with how the tax exemption for suggestion awards is calculated when a new award is made for a suggestion that already received awards before the 2003-04 tax year.

• This provision applies where an employee receives a financial benefit award for a suggestion that has already been rewarded on a previous occasion before the 2003-04 tax year.
• The remaining tax-exempt amount (the "residue of the suggestion maximum") is the overall suggestion maximum less amounts already used up.
• The amounts deducted include both any sums previously exempted under section 321 for that suggestion and the total of any earlier awards made before 2003-04.
• This ensures that the lifetime cap on tax-free suggestion awards takes full account of all prior awards, whether made under the current legislation or before it came into force.