Page 45 - DIY Investor Magazine | Issue 40

NOT JUST A SAYE SCHEME; AN M&S SAYE SCHEME
Thousands of Marks & Spencer workers received bumper payouts, as its maturing share save scheme benefitted from the company’s strong stockmarket performance – by Christian Leeming.
More than 9,200 M&S employees receive bumper share payouts as the high street giant’s recovery continues.
The scheme, launched in January 2021, is the first to mature
‘in the money’ for a decade, and will see employees – mostly customer service assistants – who put in a typical £150 a month - gain more than £10,000.
Those who saved £50 a month stands to make more than £4,500, with payments being made on 1 February.
M&S saw sales jump over Christmas and its food halls saw a record number of shoppers; food sales increased by a record 9.9%, and comparable store sales were 4.8% higher in its clothing and home division in the quarter to 30 December.
M&S rejoined the FTSE 100 Index last August after a four-year hiatus thanks to big share gains.
Chief executive Stuart Machin said: ‘We enter 2024 with a spring in our step, but clear eyed on the near-term challenges.’ The retailer added a note of caution over the outlook for
2024 though, saying: ‘As we enter the new year and 2024-
25, expectations for economic growth remain uncertain, with consumer and geopolitical risks.
‘We also face additional cost increases from higher-than- anticipated wage and business rates-related cost inflation.
‘Nevertheless, the strong Christmas trading performance provides confidence that the results for the year will be consistent with market expectations.’
M&S STAFF WARNED OVER CGT
So successful has the scheme been, that M&S employees who want to sell their shares may have to pay Capital Gains Tax; CGT can be payable on the difference between the price of the shares when they are acquired, and the eventual sale price.
Over the years, the capital structure of Marks & Spencer has changed, and the M&S share scheme guide highlights one notable event that may need to be considered when calculating any CGT-chargeable gain in relation to the company’s shares. This is the 2002 Share Consolidation and B Share Issue.
Following a capital reorganisation in March 2002, the Inland Revenue confirmed the base cost for CGT purposes was 372.35p (81.43 per cent) for ordinary shares and 68.75p (18.57 per cent) for B shares.
The Government reduced the CGT Annual Exempt Amount from £12,300 to £6,000 from 6 April 2023 and announced it will reduce further to £3,000 from 6 April 2024.
This means employees will need to think about CGT when making decisions about holding and selling shares received through their employee share plans.
Graham Bull, Head of All Employee Shareplans at Equiniti – administrators of the M&S scheme – said: ‘Fantastic to read this and another demonstration of why Share Plans are a force for good. Not only does the participant benefit, but it helps to drive productivity and the economy. Congratulations to M&S and it’s employee base.’
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April 2024
DIY Investor Magazine ·