Random Perks
Provide staff with random gifts throughout the year of up to £ 50 a time , as long as these gifts are not made on a regular basis . If you want to make your staff feel appreciated , you could pay for a treat that they might not easily be able to afford for themselves at the moment , such as a voucher for Deliveroo or Just Eat or cinema tickets .
Flexible Working
With fuel prices soaring , offering staff the option to work from home could be a really big help to those who are struggling to make ends meet .
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Employee Loans
You could choose to help staff with travel-to-work costs such as train season tickets via an interest-free loan , paid back via deductions from salary . This could enable employees to take advantage of discounts on advance purchase and so help them cut their overall costs of travel . These loans are not considered to be taxable benefits as long as they are below £ 10,000 .
Salary Sacrifice Schemes
A salary sacrifice arrangement is an agreement to reduce an employee ’ s entitlement to cash pay , in return for a non-cash benefit . The arrangement is based on gross salary .
These schemes can be used to fund a number of benefits , such as company cars , but they work best when applied to pension contributions and cycle to work schemes because in these cases the amount exchanged is exempt from tax and National Insurance ( NI ) contributions . This potentially benefits both the business and employees . There are also advantages to using salary sacrifice for employees planning to get an electric car as though these are not tax exempt , they do attract NI and tax savings .
Pension Contributions
Under salary sacrifice , the employee could reduce their gross earnings by an amount equal to their pension contributions . And in exchange , the employer then agrees to pay the total pension contribution . This means the employee continues to maintain their full pension contribution but can reduce the amount NI for both the employee and employer . Recent analysis by the pension provider Scottish Widows estimated that a UK employer with 100 staff on salaries of £ 30,000 could immediately save an estimated £ 20,7000 overall in NI contributions each year by implementing a salary exchange agreement .
So , this could be a great way to increase takehome pay for employees and reduce your own NI burden . Of course , it is also possible for employees can also opt to suspend pension payments in order to increase take home pay .
Cycle to Work Schemes
Typically , this takes the form of a hire agreement between the employer and the employee with the salary sacrifice covering the ‘ rental ’ costs . The scheme can be used to pay for both a bike and safety equipment . Again , like pension contributions , the salary exchanged under the scheme is exempt from tax and NI contributions both for the employee and employer .
The Legal Bit
With all these schemes the tax law surrounding them is not always straightforward and , as always , it is recommended you take professional advice before making them available . But with relatively little complexity all these schemes and suggestions can be implemented in a reasonably short-time frame to alleviate some of the cost-of-living issues we all now face .
Want to know more ? Get in touch for fresh ideas .
t : 01225 325580 e : hello @ richardsonswift . co . uk w : richardsonswift . co . uk
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