A guide to the 'Buy As You Earn' Plan (BAYE)

Simply choose to invest between £10 and £150 a month, or you can make lump sum payments as long as your total contributions do not exceed £1,800 in each tax year (or 10% of your salary, whichever is lower).

You can join and leave at any time*.

You can start, stop and change your monthly contribution at any time*.

*(subject to any dealing restrictions)

Your chosen amount will be deduced each month directly from your gross salary, so you won't pay tax and National Insurance Contributions (NICs) on the money you invest.

Howdens then reward you with one bonus free share (known as a Matching Share) for every three shares you buy (these are called Partnership Shares). This only applies to the first £600 worth of Partnership Shares bought each tax year.

To boost your investment, you'll receive any dividends paid by Howdens Joinery Group PLC on your Partnership and Matching Shares. These can be paid either in cash or in shares (called Dividend Shares). Whether you receive cash or Dividend Shares is up to you.

Your shares will be held free of charge on your behalf by Equiniti Share Plan Trustees Limited (known as the 'SIP Trust). To benefit from the tax savings, your Partnership and Matching Shares need to be held in the SIP Trust for five years and any Dividend Shares for three years.

You can sell your Partnership Shares at any time (although you may forfeit any Matching Shares associated with them), but if you want to get the full tax benefit from BAYE, then you need to keep your shares in the SIP Trust for five years after purchase. Matching Shares cannot be sold until they have been held for the minimum holding period. Dividends Shares can be sold during the holding period, but you may have to pay tax on them.

Shares should be held for 5 years to benefit from the full Income Tax and NI. If you leave the company, shares must be removed from the plan. If you leave due to reasons such as redundancy, retirement, injury or disability, death or TUPE transfer, plan shares are released from the plan free of Income Tax and NI.

If your shares are transferred and sold at a later date, you may be liable to pay Capital Gains Tax (CGT) if the value of your shares has increased since they were taken out of the SIP Trust. CGT will only apply on gains made over the annual exemption limit.

A holding period applies to Matching and Dividend Shares. It is the minimum period you need to hold the shares in the SIP Trust before you can sell or transfer them.

The holding period for Partnership Shares is five years, and it's three years for Matching and Dividend Shares.

Please be aware that for some people there could be a potential impact on means-tested benefits, e.g. state pension benefits, statutory sick pay, statutory maternity allowance and any other means-tested benefits and/ or tax credits.

Further information is set out in the HMRC booklet IR177.

If the total dividends you receive don't exceed the current Dividend Allowance, you won't have to pay tax. This includes dividends you may receive from other investments.

Further information about the Dividend Allowance can be found on the HMRC website. If you are unsure about your individual tax position, you should consider consulting an independent financial advisor.