Almost half of all employers (46 per cent) want HM Revenue and Customs (HMRC) to simplify the rules of salary exchange, according to research from AWD Chase de Vere Consulting. The research shows that employers recognise that salary exchange is an effective means to cut costs and improve employment benefits – but many believe that the complicated rules are preventing a wider take up of the system.
Salary exchange enables employees to voluntarily give up part of their salary in exchange for enhanced employment benefits. The scheme is recognised by HM Revenue and Customs and saves both the employer and the employee the cost of National Insurance contributions; however employers need to accurately follow the correct procedure if they are to benefit from savings.
Sean McSweeney, Principal Consultant – Online & Flex, AWD Chase de Vere Consulting, says: “We’ve guided many employers through the intricacies of setting up salary exchange – and once they understand how it works they are enthusiastic advocates of the system. 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. However, 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.”