Nobody can accuse the Revenue Commissioners of failing to dot their `i's' and cross their `t's when it comes to taxing - or not taxing - their own staff members.

Earlier this year, the Revenue shelled out £17,250 to 71 employees for a raft of suggestions on how to improve its operations. But the taxman admitted that while there might be, technically, a tax liability, it was charging itself and the employees nothing at all.

Now the Revenue has gone one step further and issued guidelines to practitioners on the tax treatment of staff suggestion schemes while a statement of practice is currently being prepared.

The schemes, operated by employers in both the public and private sectors, aim to encourage employees to suggest ways, outside the scope of their normal work activities, in which efficiency and productivity can be improved.

Successful suggestions are often recognised by an award from the employer.

The Revenue, no doubt to the relief of its employees who received cash awards ranging from £100 to £700, has decided that such schemes need not be subject to income tax or PAYE subject to certain conditions. The schemes must be formally constituted and open to all employees on equal terms. The suggestion for which the award is made must be outside the scope of the employee's normal duties. The award can only be made following a decision to implement the suggestion and must be made directly to those concerned.

The awards are also subject to financial limits and total awards are subject to an over-riding limit of £5,000 per employee per annum.

So from now on enthusiastic employees may have to pay taxes on their company cars and their various other benefits but their bright ideas will be exempt, both in the spirit and the letter of the law.