According to a report from AWD Chase de Vere Consulting, employers value salary sacrifice, which allows staff to purchase employee benefits from their gross pay with savings on tax and National Insurance, as a means of cutting costs. But 46% think the rules seem complicated and off-putting for employees,
Sean McEwen, principal consultant for online and flexible benefits at AWD Chase de Veer consulting, said: "We've guided many employers through the intricacies of setting up salary [sacrifice] - and once they understand how it works they are enthusiastic advocates of the system.
Salary sacrifice or salary exchange can help employers improve their staff benefits and it can be an important additional tool in managing costs in these difficult recessionary times. We would encourage all employers to consider salary exchange for their staff and we have the resources and experience to set up systems quickly and efficiently within HMRC rules. But we recognise that many more businesses could benefit from salary exchange and we would welcome any initiatives from HMRC, which further improve its take-up."
Benefits such as childcare vouchers, pensions and cycle-to-work schemes are often provided to staff on a salary-sacrifice basis.
Salary-sacrifice rules for employee benefits are too complicated and discourage take-up
Almost half of all employers (46%) think HMRC should simplify salary-sacrifice rules as they prevent a wider take-up of employee benefits.
