Feasibility study for a flexible benefits scheme
Employment Tax
Guidance
To consider setting up a flexible benefits scheme (see the Flexible benefits schemes 鈥� an overview guidance note), it is important that employers are both aware of the consequences of the scheme and have checked that the relevant systems are in place.
Many employers simply consider flexible benefits schemes to be a straightforward method for delivering employer鈥檚 National Insurance savings through salary sacrifice (see the Salary sacrifice arrangements 鈥� overview guidance note) but the reality is that in most cases, full prior consideration should be given to the consequences of the scheme. The most appropriate method is to undertake a feasibility study.
Flexible benefits v voluntary benefits
A flexible benefits scheme can cover benefits provided by salary sacrifice or benefits made available to employees to purchase from their net pay by taking advantage of their employer鈥檚 purchasing power (known as 鈥榲oluntary benefits鈥�) or a combination of the two. Consideration must be given to the basis on which the benefits will be provided and therefore the tax / NIC consequences of either approach.
Voluntary
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