Pay and Benefits

In the November issue of Pay & Benefits, the Helpdesk advised that free seasonal flu jabs represent a taxable benefit and suggested that they be included within the annual Pay As You Earn Settlement Agreement (PSA). I would like to clarify this point.

 

While it is correct that the provision of a flu vaccination is not listed within chapter five of the Expenses and Benefits 480 (2011) tax guide as a non-taxable payment or benefit, it is covered by guidance relating to items of a trivial nature. HM Revenue & Customs (HMRC) can and does allow trivial items to be treated as exempt from tax.

EIM21863: Particular benefits: trivial benefits states: “Seasonal flu immunisations: Where an employer provides employees with immunisations against seasonal flu (flu jabs), the benefit should be treated as trivial. This treatment only applies to routine seasonal flu jabs and does not apply to medical treatment of any sort or to other immunisations, such as immunisations against pandemic flu or other diseases.”

 

Strictly speaking, an employer should write to HMRC requesting approval to treat the benefit as exempt from tax. In practice, I suspect that most employers consider themselves covered by the wording within the EIM21863.

 

Sandra George

Payroll Manager
Financial Risk Management Limited

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I was interested to read the article last month on auto-enrolment and how the share scheme and pension industry may best co-exist. In these challenging economic times employees have a number of options to consider when choosing their workplace savings.

 

For those individuals not presently meeting the minimum requirements of auto-enrolment it will have a negative impact on their disposable income. This could make the affordability of workplace savings, such as share schemes and Individual Savings Accounts (ISAs), tough. However, employees should not view the introduction of auto-enrolment as a “pay cut” but use it to make provision to secure their financial wellbeing.

 

This is where communication and financial education are paramount, not only to understand the new regulations and the workplace savings options, but to learn how to “maximise their value”.

 

Employees will have their own personal financial issues and are likely to have different priorities, so different savings vehicles are required. While pensions are likely to remain part of a longer term savings strategy and share schemes for the medium-term, the workplace ISA can be a more flexible choice. It is also a useful savings vehicle for those senior employees who may be affected by the restrictions to pension tax relief. Undoubtedly auto-enrolment will be a financial strain to some, but with the benefit of financial education and specialist advice – the integration of workplace savings such as share schemes with pension and workplace ISAs can only provide a more prosperous financial future for all.

 

Jonathan Watts-Lay

Director

WEALTH at work

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Your news article Parents unaware of vouchers in the November issue highlighted the importance of internal communications. Some organisations make the mistake of thinking that once a benefit scheme is planned and implemented, their work ends. In reality, setting up a benefits scheme is only half the task. Ineffective communication can result in virtually zero take-up, and a waste of time and resources.

 

Businesses should look at their communications strategy in an integrated way and use the best channel for the job – by employing a variety of formats. The audience is made up of individuals of different levels, ages and backgrounds, and benefits communication should reflect this in order to achieve real results.

 

Gail Franks
Managing Director
Summersault Communications