Everyone is entitled to fair pay.  In addition, many companies provide a range of employee benefits as a means of attracting and retaining high quality staff. 

Employee benefits vary – from occupational or company pensions to private health insurance, life insurance and income protection, from having a company car and using it for personal travel, to share save schemes and discounts on products or gym membership.  Anything that’s provided to your employees in recognition of their contribution to your business can be called a benefit.  Larger companies can sometimes offer flexible benefits, where they list out all the benefits employees can have access to and employees choose the benefits that most appeal to them from the list, according to certain limits.

It’s important to remember that many benefits are taxable, and that as an employer, you have certain obligations to run any benefit scheme in accordance with guidelines set down in law.  For instance, if you employ 5 or more staff you will have to offer a stakeholder or company pension to your staff.

HMRC, for example, will need to be informed about the agreements you make over use of a company car: whether fuel is to be paid for exclusively by the employee, or business mileage is to be claimed on a pence-per-mile basis.  Private health insurance may be a taxable benefit, but there could be a tax advantage to your business in arranging policies that protect your employees’ health and welfare.

Your independent financial adviser (IFA) can give you guidance on the types of scheme available, which ones are most popular in terms of providing incentives to staff, and how to manage set-up and ongoing administration so that it has minimum impact on your day-to-day business. 

Questions you might like to ask your IFA…

What are the tax advantages to each benefit scheme?

Is it best to choose one provider, or find specialists for each kind of benefit?

Who does the administration for these benefits, the provider or my company?