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 – and can include things such as private health insurance, life insurance and income protection, company cars, 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 example starting from October 2012 (and rolled out over the next 6 years) all companies will have to over a workplace pension scheme to all eligible employees.
You will also need to inform HMRC about any 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.
Speaking to an independent financial adviser (IFA) can give you guidance on the types of scheme available and which ones are most popular in terms of providing incentives to staff. They can also help to show you how to manage set-up and on-going administration so that it has minimum impact on your day-to-day business. You can find an IFA or financial adviser here.
Questions you might like to ask an IFA or financial adviser…
- 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?