Saving money; as an organisation and as an individual

Transcription

1 Saving money; as an organisation and as an individual Salary sacrifice for cycles and bus season tickets Prepared by: Daniel Nugent Business Development Director P&MM Employee Benefits

2 Who are p&mm? Performance & Motivation Management Specialist B2B motivation, employee benefits & incentive agency Established 1962 Part of Motivcom Group PLC ISO 9001 accredited Market leader and award winner in providing voluntary benefit programmes

3 clients

4 Salary Sacrifice What is Salary Sacrifice? A salary sacrifice happens when an employee gives up the right to part of the cash remuneration due under his or her contract of employment. Usually, the sacrifice is made in return for the employer's agreement to provide the employee with some form of non-cash benefit. HMRC Section 62 ITEPA 2003 What are the benefits of such schemes? there are positive financial implications if the benefit is free of tax and/or National Insurance Contributions (NICs). Imperial College London Savings for both employee and employer! Employee saves between 31% 41% in tax and NI contributions Employer will save between 9.4% % in employer NI

5 Our tax efficient benefits We provide an integrated solution for management of the following salary sacrifice schemes childcare vouchers cycles green travel holiday plus

6 Our tax efficient benefits providing excellent tools to encourage greener commuting patterns from employees cycles green travel

7 Bicycles through a salary sacrifice mechanism

8 legislation launched 1999 to encourage employees to cycle to work tax & NI free for both employer and employee government aim to encourage sustainable transport address congestion problems improve health of your workforce maximum value of 1000 cycle is intended mainly for the purpose of commuting to and from work cycle can also be used in leisure time safety equipment forms part of the 1000

9 How it works purchase made via operating lease staff lease the equipment from the employer VAT can be passed back within local government employer recoups costs via salary sacrifice employer/finance company retains ownership throughout term employer/finance company then exercises the option to transfer ownership of the goods at the culmination of the hire agreement for fair market value

10 Will it appeal to your staff? For any employee reward to actually be valued and used it must appeal to the audience Your audience will be diverse, each individual will have their own specific requirements Novice cyclists Value for money Expert advice No intimidating environment Specialist ranges for cycle enthusiasts A desire to shop at a local store A desire to view the product before they commit

11 instantly recognisable brand retail 35% of bikes in the UK 94% of the UK population lives within 20 minutes of a Halfords store largest range of bicycles in the UK participants eligible for instore offers and promotions proven to be 10-20% cheaper than independents supply 21% of the UK starter bikes source 98% of cycles available within the UK free health & safety checks after 6 weeks

12 Utilising your local independent dealers specialised ranges for more experienced riders exclusive brands not available elsewhere often existing links with larger employers or cycle user groups satisfies buy local policies no retailer member fee for retailer as with other cycle scheme providers retailer payment processed within 72 hours (often 24hrs)

13 Select & Collect Employees will be presented with a cost table showing them the monthly costs and savings depending upon the value of equipment they chooses and the rate of tax they pay They will select a value and receive a Letter of Collection (LOC) The LOC taken to the store of their choice and redeemed for their desired cycle & safety equipment LOC value 400 Gross monthly reduction Net monthly reduction* Total cost over 18 months* Total savings* *based on a basic rate tax payer, includes VAT savings plus finance charges

14 Bus season tickets through a salary sacrifice mechanism

15 what is greentravel2work A new HMRC approved Salary Sacrifice programme developed by P&MM Encourages employees to use local bus services for their commute to and from work Legislation stems from the Finance Act (FA99) under the Government s Green Travel initiative No liability to income tax arises in respect of the provision of financial or other support for a public transport road service

16 What is greentravel2work? Allowing employees to save between 31% and 41% off the cost of an annual bus season ticket through reduced tax and NI payments Employer also saves on reduced Employer NI contributions normally between 9.4% and12.8% Can be used for whole or part of a journey between the employee s home and workplace or between one workplace and another and in employees leisure time

17 Key benefits employer Supports sustainable development policies and travel plans Compliments other salary sacrifice benefits such as Cycles Self funding initiative employer NI savings up to 12.8% Additional employee benefit that helps to position your organisation as an employer of choice An opportunity to lead the market in offering ground breaking benefits to your staff

18 Key benefits employee Helps employees in reducing their carbon footprint Saving of up to 41% on the cost of an annual bus pass or season ticket! (income tax and NI savings via payroll) Additional saving spreading the cost of an annual pass monthly 12 months interest free credit! Annual scheme - not subject to any price increases Easy to apply via the p&mm Salary Plus portal or telephone hotline Can apply at any point throughout the year portal continually open

19 The Employee Offering

20 Ticket Options For the programme to be a success it must provide ticket options that appeal to your audience Every region has a number of local bus service providers p&mm work with all major bus operators within the UK p&mm also have agreements in place with a growing number of PTE s and regional bus operators Employees will be presented with a menu of ticket options for their region where they can select the one most appropriate to their commuting patterns

21 Glasgow Ticket Illustrations First Year - All Zones - inc. All First Glasgow/S Lanarkshire Gross Monthly Cost: Net Monthly Cost: Net Monthly Cost: You save (inc. all scheme charges) (basic rate taxpayer) (higher rate taxpayer) (basic rate taxpayer) (higher rate taxpayer) First Year - Zone 3 - Includes Hamilton/Motherwell Gross Monthly Cost: Net Monthly Cost: Net Monthly Cost: You save (inc. all scheme charges) (basic rate taxpayer) (higher rate taxpayer) (basic rate taxpayer) (higher rate taxpayer) First Year - Zone 2 - East Kilbride Gross Monthly Cost: Net Monthly Cost: Net Monthly Cost: You save (inc. all scheme charges) (basic rate taxpayer) (higher rate taxpayer) (basic rate taxpayer) (higher rate taxpayer) First Year - Zones 2 & Gross Monthly Cost: Net Monthly Cost: Net Monthly Cost: You save (inc. all scheme charges) (basic rate taxpayer) (higher rate taxpayer) (basic rate taxpayer) (higher rate taxpayer) A tax/ni rate of 30% for basic rate and 41% for higher rate was used in this illustration. Prices correct as at 21/08/2008 and are subjec t to c hange. Please c onfirm the pric e on applic ation.

22 Salary Plus Election Portal Part of the P&MM service Web & telephone access Managing the participant application process for all salary sacrifice programmes Eases employer administration Making employee application simple & straightforward Helping gate keep minimum wage Managing all data collation Producing all scheme documentation

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30 Employer involvement HR will be required to approve applications for each scheme on a monthly basis Salary Plus provides all participant details in a userfriendly format Data files are then passed to Payroll for deductions to be made P&MM manage the process of dispatching LOC s & season tickets to individuals Administration of the scheme is intended to be simple and fast Communication the key to a successful scheme Posters, e-shots, brochures, roadshows, payslip flyers, PR, management briefings...

31 Employer savings Cycles Average price of letter of collection = 450 Employer NI saving per participant = (9.4% rate) (12.8% rate) Greentravel2work P&MM charge service fee of 7% for provision of the Greentravel2work programme Average cost of annual bus pass = 650 Employer NI saving per participant = (9.4% rate) 37.70(12.8% rate)

32 Summary Today's economic climate is forcing people to look at their expenditure Organisations and individuals! People are beginning to feel obliged to do more for the environment Organisations and individuals! This is a facility to help save money and the environment Unique end-to-end provider of greentravel2work Unique provision of best of both worlds offering for cycles Exclusive Salary Plus application portal facilitating 1 or both schemes Assistance with local tax office application - a tried and tested process -

33 from Questions

34 Daniel Nugent Business Development Director Mobile Contact details