Mini-budget and subsequent U-turns
Since the forum was recorded, Chancellor Jeremy Hunt has reversed much of his predecessor Kwasi Kwarteng's mini-budget measures. You can read our updated summary of the latest employment tax perspective at Mini-budget: plan for growth and subsequent U-turns impact employment tax.
Tax-free benefits to help employees
Specialists from our employer solutions and people services teams shared insights on how to reward employees either tax-free or in a tax-efficient manner. Providing a Christmas present, virtual GP access, working-from-home allowances, parking at the office, office catering and discounts with high street and online retailers... there's a lot that can be done. It was a good reminder of where the opportunities are for employers to help out their staff, as well as offering a potential recruitment aid in the war for talent.
There are also benefits for both employees and businesses of providing benefits via salary sacrifice, including the case for saving money on a new electric company car. It's important to be aware of the detail when introducing such schemes, however. It's easy to be caught out by the interaction of the rules with your existing pay, policies and payroll, potentially leading to an ineffective arrangement which is non-compliant. Benefits providers generally don’t include tax advice when offering new arrangements and even if it was sought at the time, there can be 'compliance fatigue'. An example of this was raised where key personnel changes can cause changes to processes without consideration of their intended purpose to underpin the tax or National Insurance Contributions (NIC) effectiveness of the arrangement.
The topic of 'benefit housekeeping to maximise value' was raised as a reminder of the benefits offered via salary sacrifice and as a check for those who have opted out to see if their situation has changed and they might benefit from joining. Awareness of employer-provided benefits can decline overtime so employers may wish to remind employees about the benefit suite available during the current cost-of-living crisis.
Employers forum: optimising employment costs to maximise value
Subsidised training – at any time in your career
Apprenticeships can provide valuable financial support for businesses, whether through retraining or upskilling existing employees or developing the next generation. Many employers are paying the Apprenticeship Levy and not deriving any direct gain from it. We heard how easy it can be to set up a scheme with an approved training provider. In fact, even if you're not paying the levy, your business can still benefit from co-investment by paying just 5% of the cost of the training, with the government covering the remaining 95%. There’s also the option to transfer unspent levy between employers to share the benefits.
There's a myth that apprenticeships are for young people leaving school. But government figures in show that 46% of apprentices are now aged 25-plus (apprenticeships and traineeships data for academic year 2021/2). Apprenticeships can be available to all, irrespective of previous qualifications – even degrees if they're in a different subject. One of the key advantages for employers is staff retention: 80% of our current apprenticeship clients have seen an increase in retention. Another benefit is the development opportunities for senior staff through management and MBA courses.
Apprenticeships – further education and skills
Tax specialist programme
The forum Q&A brought up some interesting audience questions. The summary is that the tax treatment of many benefits can differ and there can be complex rules to ensure any reliefs will apply, so take professional advice.
Our new tax specialist hub is designed to help businesses stay resilient in a changing environment. It provides technical insights, analysis and guidance on key topics. Clients and contacts can also join our popular CPD tax events, webinars and in-person events through there.