Top Ten Tips: From cycles to shares, your wallet could feel the benefit

AMID widespread wage stagflation, employers are increasingly looking to retain and attract staff by offering benefits.

From pensions and company cars to cycle schemes and vouchers, there’s now a vast array of benefits on offer for many employees.

Susan Cruden, a senior manager in the employer solutions team at Grant Thornton, offers her top tips on taking advantage of company perks.

1 Compare benefits and your needs

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If you have signed up to receive private medical care and have never used it, or you’re happy to receive treatment through the NHS if you need it, ask your employer if you could have the cash equivalent instead. In these tough economic times, having more money in your pay packet would no doubt be warmly welcomed.

2 Get the lowdown

Many employees often don’t even realise what their employer is actually providing. For example, what is the monetary equivalent of that 8 per cent pension contribution? It is worth approaching employers to see if they can provide a remuneration statement, which is otherwise known as a total reward statement. Seeing in black and white what their employer is contributing to their pension pot can sometimes make all the difference in feeling more valued in the workplace.

3 Boost your real pay

Taking advantage benefits that cut liabilities for tax and national insurance contributions (NICs) can boost employees’ take-home pay. For instance, childcare vouchers are great for employees with children in nursery, at after-school clubs or being looked after by a registered childminder. For basic rate taxpayers, up to £55 a week can be claimed through salary sacrifice, which means on average, they pay for £243 worth of vouchers per month that technically cost the employee £165.

4 Get on your bike

In cycle-to-work schemes, bikes primarily used for business journeys can be lent to employees on a tax-and NIC-free basis. Generally an employer will lease the cycle to the employee for a specified period, and at the end of the lease period, the employee will have the opportunity to buy the cycle from the employer at a lower cost than if they bought it brand new.

5 Make a sacrifice

It sounds unlikely, but pension contributions are another way to have more cash in your pocket every month. If you make the contribution yourself you will get tax relief, but still pay NICs. Alternatively by sacrificing part of your salary, in return for an employer’s pension contribution, both you and your employer will save NICs. Some companies will also pass on their savings in NICs.

6 Voucher savvy

High street retail vouchers are liable to tax and NICs, so the efficiency here is really through the employee being able to buy the vouchers at a discount to the face value of the voucher. This is particularly handy in the run-up to Christmas, when employees will be able to get their shopping done for less. On average, you can save between 5 and 15 per cent off the full retail price.

7 Canny cover

It is worth looking into insurance policies, such as medical, travel and income protection. If employers can successfully negotiate corporate discounts with the relevant providers, this means that employees can take full advantage of the policies as and when they need them.

Apart from the monetary value (there will be no employee’s NICs due) there is also the added bonus that it will save employees valuable time when looking to take out a policy as they won’t have to shop around for the best possible deals.

8 Sharing in success

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Company share schemes are fantastic as they enable employers to grant share options to employees, who can exercise the options and acquire the shares at some point in the future. Hopefully, the shares will have grown in value between the grant and the exercise date, enabling the employee to enjoy that growth in value in a tax-efficient manner.  

9 Extra incentives

Companies carrying on a qualifying trade and who otherwise meet the qualifying criteria can offer enterprise management incentive (EMI) plans, which are generally regarded as top of the pick list. These are HM Revenue & Customs-approved schemes and employees who fit the bill can enjoy the benefits of the shares in the scheme.

10 Keep your options open

If you get the opportunity you should consider enrolling in a company share option plan (CSOP).

Again this is an HMRC-approved scheme and it has less qualifying conditions than the EMI, so it has a wider appeal. The downside is that there is a limit on the value of share options that employers can grant to any one employee, and there is a qualifying period for holding the share options before the full tax breaks can be enjoyed.