With the recent HMRC changes in tax treatment and the subsequent Finance Bill, there are a number of myths floating around about the impact of salary sacrifice schemes, leaving many organisation confused over facts.
The truth is salary sacrifice schemes such as Technology and Smartphone Benefits are as relevant as ever and remain a fantastic way to drive employee engagement and productivity . Here are some of the common misconceptions tackled head on…
Myth 1. Salary sacrifice is no longer available for technology
Untrue. Salary sacrifice schemes for Technology and Smartphones have always been available and our schemes have been in operation for over 15 years and continue to be popular. The Let’s Connect benefit is approved by HMRC following legislative updates in April 2017.
Myth 2. Savings aren’t available any longer
Untrue. Employees still make savings in National Insurance (and pension contribution where applicable) and there are no end of scheme payments. Employers can build in an administration rebate and some organisations also make pension contribution savings too (NHS in England and Wales).
Myth 3. It’s too risky, staff may leave without paying the full value of the equipment
Untrue. Firstly, the agreement that the employee signs covers their obligation to repay. We understand organisations have different appetites towards risk and we have solutions to satisfy yours. We can offer the addition of an admin fee, or alternatively an insurance solution to mitigate against non-payment if required, to provide cover should an employee leave without having paid in full for their equipment.
Myth 4. The schemes are time consuming and hard to administer
Untrue. Following the tax changes in 2017 the schemes are easier than ever to administer, with a ‘once only’ P11d entry and simplified payroll administration. We provide a fully managed service at no cost to ensure your time is spent on your day job, not running our scheme.
Myth 5. Everyone has a computer now so there’s no demand
Untrue. Our schemes are as popular as ever with excellent take-up rates for an ever-widening array of products and by offering the latest devices, employees can gain knowledge and relevant digital skills that can translate into the workplace. The rate of evolution and advances in technology products like PCs, tablets, Smartphones and Smart Home means that there’s always a demand for the latest equipment to benefit employees and their families.
Myth 6. These schemes encourage staff to get into debt
Untrue. Limits on what employees can spend is agreed in advance with you the employer, and staff are generally cautious regarding how much salary reduction to commit to. Supporting financial well-being and budgeting, these schemes provide a safe, method of paying for equipment, giving staff an alternative to high street finance or ‘payday’ loans. We ensure checks are made so that staff do not go below the level of the National Minimum Wage (or National Living Wage if aged 25 or over).
For more information on running a Let’s Connect employee benefits scheme for your organisation, simply complete the enquiry form below or call one of our employee benefit consultants on 0330 2000 231.