BlackettwalkerltdPWP IFA FU June13 employee
FINANCE UPDATES
JUNE 2013
Employee beneits Offering an attractive and tax-eficient remuneration and beneits package can help you to recruit and retain high-calibre employees. This guide examines some of the employee beneits that are available.
Why offer employee beneits? Employee beneits can help to motivate and engage staff and could make all the difference to the satisfaction and productivity of your workforce. Hiring the right people is rarely easy and holding on to them even harder. An effective remuneration strategy should meet the balance between what your business can afford and being attractive to the best talent within the industry. According to the Chartered Institute of Personnel and Development, estimates suggest that the value of beneits can account for around 40 per cent of the costs to an organisation of employing staff.
Types of beneit There are several beneits you could choose to offer. The key is to make sure that the beneits offered are seen as beneits and that they are clearly communicated to your employees. If they don’t know about them or use them, then how can they be of beneit? Gosforth Park Avenue, Newcastle upon Tyne Tyne & Wear NE12 8EG 0191 256 9600 [email protected]
Many beneits can also be tax eficient, as they can be allowable expenses and deductions for corporation tax purposes, beneitting the employer, or have individual tax advantages for employees. It is important to seek advice to make sure your strategy is as taxeficient as possible. Pensions In October 2012, the roll-out of
pension auto-enrolment began, thus changing the face of workplace pension provision. Over the next few years all businesses will have to provide a qualifying pension scheme that allows for employees to be automatically enrolled. Employers will also have to make a contribution into that pension for qualifying employees. If you do not have a workplace pension scheme in place it is important that you look into it now. By April 2015, all businesses with more than 50 employees will need to have auto-enrolment in place. Businesses with fewer staff will be close behind. Employers can also enhance pension beneits with matched-contributions, age related increases, long-service increases and so on.
Tax UPDATE Life insurance, income protection and critical illness insurance These beneits can be surprisingly affordable to provide, while offering your employees valuable peace of mind and security. Schemes that offer 4x salary ‘Death in Service’ beneits are a typical beneit. You may choose to offer just one of these beneits and, if so, it is worth researching which would be better received. Each offers signiicant security to your employee and their family’s inances should anything happen to them. Private medical insurance Private medical insurance can help you to ensure your employees receive medical attention quickly, minimising the time they are away from the workplace and any potential disruption to your business. NHS waiting times can be many months but medical insurance can help to fast track that wait. Private medical insurance can be expensive to provide but it is important to weigh up the potential returns for your business. www.blackett-walker.co.uk
Employee beneits Voluntary and lexible beneit schemes Voluntary and lexible beneit schemes are normally offered via platforms, which are essentially IT systems that allow your staff to access beneits such as high street discounts, bike for work schemes, childcare vouchers and more. These platforms are usually owned by a separate company. You can create a package that suits your business and your employees can pick and choose which beneits they use. Flexible beneits typically include things like being able to trade holiday entitlement, cycle to work schemes and health screenings, while voluntary beneits tend to be things like retail discounts. Dental and optical health care Offering dental and optical beneits can be practical for your business as well as your employees. As with medical insurance, offering dental cover, eye care vouchers and check-ups could keep your workforce healthy and reduce their time away from the ofice. According to the Eyecare Trust, 85 per cent of people admit to having problems with their vision, which could make it a worthwhile beneit. Both can be cost-effective too, with dental cover available from around £7 per month per employee.
Other beneits include childcare vouchers, corporate ISAs, health cash plans and gym memberships. Some are more popular than others but the important thing is to devise a package that is as tax eficient as possible and that works for your business.
Communication is key You won’t be able to know whether a beneit is worthwhile or not without talking to members of staff and understanding what they are interested in. Issue a survey to your employees to establish their requirements and which beneits would be of interest. Once you have decided on your remuneration and beneits package it is vital that it is communicated to your staff. They won’t be able to view anything as a beneit if they don’t know about it. What’s more, an investment in an employee beneits package that suffers from poor take-up is going to be money wasted for your business.
Seek advice Getting your employee beneits scheme right is important. We can help you to understand your options, ind the right products and incentivise your employees in a way that works for your business and its tax arrangements.
Contact us to discuss any area of employee beneits.
Employee share schemes Offering shares in the business to your employees can be a great way to motivate and engage your staff. There are a few ways to offer shares to your employees at the moment, including Save as You Earn and Share Incentive Plans. Recent changes have helped to make it easier for employers to buy back shares when an employee leaves a business. The Government’s plans to allow employees to waive certain employment rights in exchange for shares has now been passed by Parliament after signiicant amendments were made to the plans. More details are expected to follow soon. Important information The way in which tax charges (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future. This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content. Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. Errors and omissions excepted.
Blackett Walker Ltd is Authorised & Regulated by the Financial Conduct Authority. Registered in England Number: 2895559.
JUNE 2013
Employee beneits Offering an attractive and tax-eficient remuneration and beneits package can help you to recruit and retain high-calibre employees. This guide examines some of the employee beneits that are available.
Why offer employee beneits? Employee beneits can help to motivate and engage staff and could make all the difference to the satisfaction and productivity of your workforce. Hiring the right people is rarely easy and holding on to them even harder. An effective remuneration strategy should meet the balance between what your business can afford and being attractive to the best talent within the industry. According to the Chartered Institute of Personnel and Development, estimates suggest that the value of beneits can account for around 40 per cent of the costs to an organisation of employing staff.
Types of beneit There are several beneits you could choose to offer. The key is to make sure that the beneits offered are seen as beneits and that they are clearly communicated to your employees. If they don’t know about them or use them, then how can they be of beneit? Gosforth Park Avenue, Newcastle upon Tyne Tyne & Wear NE12 8EG 0191 256 9600 [email protected]
Many beneits can also be tax eficient, as they can be allowable expenses and deductions for corporation tax purposes, beneitting the employer, or have individual tax advantages for employees. It is important to seek advice to make sure your strategy is as taxeficient as possible. Pensions In October 2012, the roll-out of
pension auto-enrolment began, thus changing the face of workplace pension provision. Over the next few years all businesses will have to provide a qualifying pension scheme that allows for employees to be automatically enrolled. Employers will also have to make a contribution into that pension for qualifying employees. If you do not have a workplace pension scheme in place it is important that you look into it now. By April 2015, all businesses with more than 50 employees will need to have auto-enrolment in place. Businesses with fewer staff will be close behind. Employers can also enhance pension beneits with matched-contributions, age related increases, long-service increases and so on.
Tax UPDATE Life insurance, income protection and critical illness insurance These beneits can be surprisingly affordable to provide, while offering your employees valuable peace of mind and security. Schemes that offer 4x salary ‘Death in Service’ beneits are a typical beneit. You may choose to offer just one of these beneits and, if so, it is worth researching which would be better received. Each offers signiicant security to your employee and their family’s inances should anything happen to them. Private medical insurance Private medical insurance can help you to ensure your employees receive medical attention quickly, minimising the time they are away from the workplace and any potential disruption to your business. NHS waiting times can be many months but medical insurance can help to fast track that wait. Private medical insurance can be expensive to provide but it is important to weigh up the potential returns for your business. www.blackett-walker.co.uk
Employee beneits Voluntary and lexible beneit schemes Voluntary and lexible beneit schemes are normally offered via platforms, which are essentially IT systems that allow your staff to access beneits such as high street discounts, bike for work schemes, childcare vouchers and more. These platforms are usually owned by a separate company. You can create a package that suits your business and your employees can pick and choose which beneits they use. Flexible beneits typically include things like being able to trade holiday entitlement, cycle to work schemes and health screenings, while voluntary beneits tend to be things like retail discounts. Dental and optical health care Offering dental and optical beneits can be practical for your business as well as your employees. As with medical insurance, offering dental cover, eye care vouchers and check-ups could keep your workforce healthy and reduce their time away from the ofice. According to the Eyecare Trust, 85 per cent of people admit to having problems with their vision, which could make it a worthwhile beneit. Both can be cost-effective too, with dental cover available from around £7 per month per employee.
Other beneits include childcare vouchers, corporate ISAs, health cash plans and gym memberships. Some are more popular than others but the important thing is to devise a package that is as tax eficient as possible and that works for your business.
Communication is key You won’t be able to know whether a beneit is worthwhile or not without talking to members of staff and understanding what they are interested in. Issue a survey to your employees to establish their requirements and which beneits would be of interest. Once you have decided on your remuneration and beneits package it is vital that it is communicated to your staff. They won’t be able to view anything as a beneit if they don’t know about it. What’s more, an investment in an employee beneits package that suffers from poor take-up is going to be money wasted for your business.
Seek advice Getting your employee beneits scheme right is important. We can help you to understand your options, ind the right products and incentivise your employees in a way that works for your business and its tax arrangements.
Contact us to discuss any area of employee beneits.
Employee share schemes Offering shares in the business to your employees can be a great way to motivate and engage your staff. There are a few ways to offer shares to your employees at the moment, including Save as You Earn and Share Incentive Plans. Recent changes have helped to make it easier for employers to buy back shares when an employee leaves a business. The Government’s plans to allow employees to waive certain employment rights in exchange for shares has now been passed by Parliament after signiicant amendments were made to the plans. More details are expected to follow soon. Important information The way in which tax charges (or tax relief, as appropriate) are applied depends upon individual circumstances and may be subject to change in the future. This document is solely for information purposes and nothing in this document is intended to constitute advice or a recommendation. You should not make any investment decisions based upon its content. Whilst considerable care has been taken to ensure that the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information. Errors and omissions excepted.
Blackett Walker Ltd is Authorised & Regulated by the Financial Conduct Authority. Registered in England Number: 2895559.
