Small Businesses Advised to Take Action to Comply with New National Living Wage
Only 9% of employers have reviewed Salary Sacrifice usage against new National Living Wage requirements while 39% are unaware of upcoming changes.
Small business owners are being urged to take action to ensure they comply with the new National Living Wage (NLW) in a report by Jelf Employee Benefits. The new NLW requirement sets a higher minimum income level for employees aged over 25, rising to £7.20 an hour from April 2016. While this element is generally understood, the interaction with the use of Salary Sacrifice in employee benefits provision appears to be an unknown problem for many businesses and the report has suggested that employers may inadvertently breach the new minimum income level when it comes into effect. The survey found that only 9% of employers have reviewed Salary Sacrifice usage against new NLW requirements with almost four in 10 employers (39%) unaware of there even being an issue. While 19% were aware of the possible implications of using Salary Sacrifice, they were yet to review their situation to ensure compliance. Salary Sacrifice is a widely employed and hugely tax-efficient mechanism of funding many employee benefit package. Earlier this month, it was revealed that the new NLW may pose problems for Scottish businesses and those outside the major cities. Commenting for Jelf Employee Benefits, Steve Herbert, said: “These findings are more than worrying. The income level and date of introduction were both established in the summer budget statement and we would ,therefore, have expected employers to be taking action to ensure compliance with this new edict.” SOURCE