A Share Incentive Plan (SIP) is a type of employee share scheme in the United Kingdom that is designed to encourage employees to become shareholders in the company they work for. SIPs are a tax-efficient way for employees to acquire shares in their employer, and for employers to provide a benefit to their employees in the form of shares.

Under a SIP, an employer can provide employees with free or matching shares, or offer them the opportunity to purchase shares at a discounted price.

A key feature of SIPs is that the shares are held in a trust for the benefit of employees. This trust is known as a "SIP trust" and it can give the employee beneficial tax treatment on their shares. For example, some or all of the shares may be eligible for tax relief on the initial purchase price, and capital gains tax relief when the shares are sold.

There are different types of SIPs, each with its own set of rules, such as Company Share Option Plan (CSOP) and Save As You Earn (SAYE) scheme. Employers can choose the plan that best suits the needs of the company and the employees.

It's important for employees to be aware that the terms and conditions of the SIP may affect the tax treatment of the shares and it's best to seek advice from a tax professional or a financial advisor before participating in a SIP.