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2. Profit-related Pay (PRP) (TA 1988, sections 169–84). These rules give tax benefits to a certain level of pay made out of profits. They cannot apply to profit periods beginning after 31 December 1999 see Fourth edition §16.11.
3. Approved profit-sharing schemes (APSSs) (TA 1988 sections 186–87, schedules 9 and 10). These schemes do not involve options but the issue or transfer of actual shares to be held for employees. (See Fourth edition §16A.8.) Contributions to such schemes are no longer deductible. On phasing out see FA 2000 section 49 in main text.
4. Employee share ownership plans (ESOPs) §16.9 (FA 1989, sections 67–74, schedule 5). These plans concern trusts (qualifying employee share trusts (QUESTs)) which may be used to receive money from the employer with which trustees later buy shares for employees. (See Fourth edition §16.9). Contributions to such schemes are no longer deductible. See FA 2003 section 142.

In studying the rules the following points must be noted which affect the willingness of the employer and employee to choose a particular benefit, bearing in mind always that their interests may not be the same:

1. Does the employer incur an expense—if so, is it deductible in computing profits?
2. If the employee receives a benefit, when will it be taxable?
3. If the employee receives a benefit, will it be taxable to income tax under Schedule E or to CGT?
4. If the employee receives a benefit, will it be subject to PAYE?
5. If the employee receives a benefit, will it be subject to NICs?

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