Salary Sacrifice

Small Businesses Advised to Take Action to Comply with New National Living Wage

Small Businesses Advised to Take Action to Comply with New National Living Wage

Small business owners are being urged to take action to ensure they comply with the new National Living Wage (NLW) in a report by Jelf Employee Benefits. The new NLW requirement sets a higher minimum income level for employees aged over 25, rising to £7.20 an hour from April 2016. While this element is generally understood, the interaction with the use of Salary Sacrifice in employee benefits provision appears to be an unknown problem for many businesses and the report has suggested that employers may inadvertently breach the new minimum income level when it comes into effect. The survey found that only 9% of employers have reviewed Salary Sacrifice usage against new NLW requirements with almost four in 10 employers (39%) unaware of there even being an issue. While 19% were aware of the po... »

Funding a Car through Salary Sacrifice

Funding a Car through Salary Sacrifice

Funding a new car under a salary sacrifice scheme has many benefits to the employee and can be achieved with minimal cost and disruption to an employer. In brief terms, it is an arrangement put in place by an employer as an employee benefit whereby the employee agrees to give up part of their pre-tax salary – or ‘sacrifice’ it – in exchange for leasing a non-cash benefit such as a car. It is not intended as a replacement for a traditional company car scheme. While benefit-in-kind tax is payable by the employee on the car based on its list price and carbon dioxide emissions, this is often substantially lower than the income tax the employee would have paid on the salary sacrificed. And unlike a personally funded new car, a car provided under salary sacrifice includes all the traditional ben... »