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Forty-six per
cent of employers would like to see a simplification of the salary
exchange rules from HM Revenue and Customs (HMRC), says AWD Chase
de Vere Consulting.
Research by the group shows that while employers recognise that
salary exchange is an effective option when it comes to cutting
costs and improving employment benefits, the complicated rules are
preventing a broader range of firms from taking up the system.
The scheme, which allows employees to voluntarily sacrifice part
of their salary in exchange for enhanced employment benefits, is
recognised by HMRC and saves the cost of National Insurance contributions.
Employers must, however, follow the complicated procedures correctly
if they are to benefit from savings.
“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,” commented
Sean McSweeney, principal consultant of Online and Flex at AWD Chase
de Vere Consulting.
“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.”
- Pensions Age July 2009
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