The recent salary sacrifice consultation, which closed on 19 October, is causing a bit of a headache for those employers with enrolment windows happening during this period of unrest.
The consultation proposal didn’t mention offering Grandfather Rights to those employees already in a scheme that could be affected. And whilst this is something we flagged very strongly in our response to HRMC, there is no guarantee that the government will accommodate this.
So if you have an enrolment window, it’s important to understand that you do still have options for your mobile phone and computer schemes.
What can you do?
1. Run a 12-month Technology Scheme (a combined computers and mobile phone scheme, instead of a 3-year scheme.)
Regardless of what the government announces in the Autumn Statement on 23 November, your employees wouldn’t be affected
This meets HMRC requirements - a 12-month scheme doesn’t attract any tax savings anyway, and so it wouldn’t be impacted
Your employees would still benefit from National Insurance savings (12% for a Basic rate taxpayer)
This way, you can continue to help your staff get access to technology, and help them spread the cost of the device over a year (effectively an interest-free loan, with no credit checks). So there’s no need for your employees to wait whilst they save their pennies; they can own the device now!
2. Carry on as normal
Advise your employees what’s being proposed by government and clearly communicate what that could mean if they don’t make any changes to the current proposal. Your employees can then make an informed choice, based on what information is available ie, the tax savings they enjoy today may be taken away in the future.
3. Presume Grandfather Rights will be offered
Assume government will amend their proposal and offer Grandfather Rights to all employees already in an affected salary sacrifice scheme. This ensures they will be unaffected for the duration of their contract and will enjoy the savings they originally signed up to.
Call or email us for more information, or to set up a Technology scheme enrolment window before Christmas.