SUMMER 2023 NEWSLETTER
In this edition we feature:
Salary Sacrifice Benefits which we hope will be useful to our readers.
This time our “starring” team member is Ryan Tozer who many of our clients and working partners will know well.
And there’s news of the team getting muddy for charity as well as an update about Private Medical Insurance for individuals.
HOW SALARY SACRIFICE BENEFITS SAVE YOU AND YOUR EMPLOYEES MONEY
The definition of a Salary Sacrifice arrangement is “An agreement to reduce an employee’s entitlement to cash pay in return for a non-cash benefit.” Employers set it up by changing the terms of the employee’s employment contract to which the employee needs to agree. The advantage for employees is they don’t pay income tax and National Insurance (NI) on the sacrificed amount. Employers also save on employer NI contributions (currently 15.05%). These types of benefits can be an effective and low-cost way of helping employers attract employees and increasing retention. Salary sacrifice schemes also make high-priced items such as cars or bikes more affordable by allowing employees to spread the cost. What Types of Benefit are Available via Salary Sacrifice? Bikes Known as the “Cycle to Work” scheme the employee chooses a bike (and associated equipment) which is usually purchased by the employer at the outset. The employee hires the bike for the term of an agreement. There’s no limit on the value of the bike under the scheme unless the employer decides to cap it. At the end of the hire period there are a few different options for the employee, including buying the bike. There are plenty of scheme providers in the UK and as we work with all of them, we can guide you which one to use and how to set things up. Technology Schemes This benefit allows employees to access the latest technology from desired well-known brands and spread the cost monthly in a tax efficient way. They can choose from thousands of products including laptops, TVs, phones, smart health, household appliances, audio equipment and more! The employer initially funds the item, and the employee pays it back monthly via payroll from pre-taxed earnings which saves National Insurance. However, this benefit needs to be reported as a P11d Benefits in Kind expense and so is not a “true” salary sacrifice benefit as such because income tax is not saved. Cars Employees can sacrifice a fixed amount of their salary each month in exchange for a brand-new lease car. The set monthly amount usually includes the essential extras that come with car ownership such as road tax, insurance, breakdown cover, servicing, and maintenance. The business doesn’t own the car, the employee is simply borrowing it from the lease company who remains the registered keeper of the lease car, which is returned at the end of the term. Pensions With salary sacrifice pension contributions the employer reduces the employee’s original salary by the amount the employee wishes to make as a pension contribution. The employer then pays the amount of the salary reduction as an additional employer pension contribution on top of any existing employer pension contributions (i.e. a minimum of 3% as per auto-enrolment rules). Because the amount of the salary sacrifice is deducted from pre-tax salary it means employees save income tax and National Insurance contributions (NIC’s) on the sacrificed amount. The employer also saves their 15.05% employer NIC’s and sometimes opt to add this saving (or part of it) to further boost the employee’s retirement savings further. It also means that work-related statutory payments (payments paid by the employer and based on average earnings over a fixed period, such as statutory maternity pay and statutory sick pay) will be affected too. Excellect works with many expert Financial Advisers nationally who can advise on Salary Sacrifice Pension Schemes. Please ask us and we can introduce you as we do not offer pension advice ourselves. Further Considerations The employee’s reduced salary must remain above the National Minimum Wage. Consideration also needs to be given to employees on means tested benefits. Salary sacrifice schemes reduce the employee’s salary, so it can impact credit or mortgage applications.
MEET RYAN TOZER– THE MAN BEHIND THE
In each newsletter we like to feature an Excellect team member to help you to get to know us better. For many of our existing clients and partners, the person they will have spoken to the most at Excellect is Ryan Tozer, our Senior Employee Benefits Adviser in charge of the client renewals team.
Here Lucy Meredith interviews Ryan……
Lucy: You’ve been here since the beginning of Excellect, what do you like so much about it?
Ryan: The thing I like most is the exciting pace of change and rapid growth that’s possible in a small business like ours. In 2014 there was just Simon (our MD) and I, but there is now a team of 14! I love being part of our team and being able to have a say in things. If I feel something could be improved, it’s great I can openly share my ideas and contribute to making a difference. I really like that about our company.
Lucy: What do you enjoy most about your job?
Ryan: I enjoy the key responsibilities that come with my role, although that can come with pressure and deadlines to meet. I am involved with both new clients and the renewal of existing client policies. I like both aspects as it means I see new clients at the start of their relationship with us, and my team continues to support and work alongside them through the renewal process every year.
Lucy: What do you like to do outside of work?
Ryan: I am a huge movie fan and love watching the latest film releases, especially the Marvel ones! I am also really into series watching. My favourite at the moment is The Witcher on Netflix. As well as TV and movies, I love going to festivals and concerts. I enjoy travelling and Bruges is a regular trip as it has both of my favourite things – beer and chocolate!
Lucy: How would you like to progress at Excellect in the future?
Ryan: I’m focusing on my professional qualifications right now and aim to get my Diploma in Insurance. I would also love to build up a larger team of advisers to work alongside Lili and myself and see our business grow still further. A personal goal of mine is to get back to my driving lessons and pass my driving test by the end of next year!
Lucy: We will hold you to that Ryan!!
EXCELLECT SUPPORTING OUR CHARITY – CANCER RESEARCH
Every year as a company, Excellect likes to support a different charity and find ways of raising money. This year the team all decided to support Cancer Research UK. One of our activities to raise money for this amazing charity was take part in the Bristol Pretty Muddy 5K in June.
We started a Just Giving page and shared it on our social media platforms, and we managed to raise £500!
Excellect then kindly matched this amount taking us to a total amount for the charity of £1,000. Well done to our team members Honey, Laura, Lucy, Ryan, and Charlie who took part and see the before and after photos above.
We are looking forward to seeing what else we can get involved with to raise more money for our charity this year.
EXCITING NEWS ABOUT INDIVIDUAL PRIVATE
Excellect has always had a specialism in whole of market Private Medical Insurance (PMI), for both companies and individuals. In recent years Charlie Francis has provided the PMI advice for individuals. Excellect has decided to focus on the employee benefit side of its business, and so Charlie has set up his own company HowhaPMI (said aloud as How Happy Am I).
Excellect will still be working closely with Charlie who will remain working in the Excellect office space. But for any new introductions to us for individual PMI requirements we will refer you across into Charlie’s expert hands.
THE EXCELLECT BENEFITS WHEEL
“Everyone Benefits – through personality, professionalism and passion. Employees are at the heart of every successful business
– you are at the heart of ours.”