ETASSUM29030 - Schedule 2 share incentive plan (SIP): Taxation: Disadvantages
Buying partnership shares under a Schedule 2 Share Incentive Plan may effect an employee’s entitlement to contribution based, earnings-related and means-tested state benefits, tax credits and work-related payments.
A participant in a Schedule 2 SIP will not have paid NICs on the pay that has been used to buy partnership shares. As a result, they may not have paid sufficient NICs to qualify for certain state benefits. This is likely to affect only a small number of people. More information can be found in the “IR177 – Share Incentive Plan and your entitlement to benefits” and "Share Incentive Plans: a guide for employees" documents published on the gov.uk website https://www.gov.uk/government/publications/share-incentive-plans-and-your-entitlement-to-benefits-ir177