Income Tax (Earnings and Pensions) Act 2003 Schedule 3 paragraph 6

All-employee nature of scheme

Schedule 3 paragraph 6 sets out the eligibility requirements that ensure a SAYE option scheme is open to all qualifying employees and directors on an equal basis.

• Every employee or full-time director of the scheme organiser (or a constituent company in a group scheme) who has served a qualifying period of up to 5 years, whose earnings are UK-taxable general earnings, and who does not hold a material interest in the company, must be eligible to participate.
• The scheme must not contain any feature that discourages eligible persons, or those who were previously eligible before leaving their role, from actually taking part.
• The only exceptions to the anti-discouragement rule are provisions that are specifically required or permitted elsewhere in Schedule 3.
• These rules ensure the scheme genuinely operates on an all-employee basis, which is a fundamental condition for SAYE option schemes to receive tax-advantaged status.