NEWS
HMRC CUTS EMPLOYEE SAVINGS ACCOUNTS INTEREST TO 0% |
23/08/11
HM Revenue & Customs (HMRC) has cut interest rates for employee savings accounts to zero per cent, it has been revealed.
According to UHY Hacker Young, the move could undermine efforts to promote employee share ownership, which is already 40 per cent below its peak in 2001-2.
Roy Maugham, tax partner at the firm's London office, told people in corporate finance roles that the move introduces an inflation risk into a scheme that is supposed to be risk-free.
Mr Maugham said the government should not allow HMRC to cut interest on such accounts "to such a derisory level".
"By setting interest rates at zero, employees who later decide not to exercise their options will have taken a big hit as inflation will have eroded away their savings," the tax expert added.
He went on to say that the decision was "poorly timed".
Earlier this month (August 8th), UHY Hacker Young reported that employers cut job perks for the fifth year running this year.
Take the next step in your career and search for corporate finance jobs with Integral
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According to UHY Hacker Young, the move could undermine efforts to promote employee share ownership, which is already 40 per cent below its peak in 2001-2.
Roy Maugham, tax partner at the firm's London office, told people in corporate finance roles that the move introduces an inflation risk into a scheme that is supposed to be risk-free.
Mr Maugham said the government should not allow HMRC to cut interest on such accounts "to such a derisory level".
"By setting interest rates at zero, employees who later decide not to exercise their options will have taken a big hit as inflation will have eroded away their savings," the tax expert added.
He went on to say that the decision was "poorly timed".
Earlier this month (August 8th), UHY Hacker Young reported that employers cut job perks for the fifth year running this year.
Take the next step in your career and search for corporate finance jobs with Integral
