Setting up a Salary Sacrifice Scheme

Salary Sacrifice Schemes - How to set one up..

Setting up a salary sacrifice scheme is actually a straightforward process, however, there are a number of steps to be completed and if not completed correctly there is no guarantee that the scheme will be compliant, a risk that no employer should take.

In simple terms there are three elements to consider when setting up a salary sacrifice scheme.

1. Tax advice, this is required to ensure that the correct dispensation has been obtained, or has to be obtained from HMRC. Without the correct dispensation underpinning the scheme it is impossible to complete stages 2 and 3.

2. Legal advice, from ensuring the correct contracts are in place to producing scheme procedures to ensuring the correct communication with workers takes place it is imperative that professional legal advice has been sought, and followed.

3. Management of the scheme, having set up a compliant scheme often the biggest hurdle to overcome is how to run the scheme in a compliant manner, and in accordance with the legal and tax rules of the scheme.

Although we have relationships with a number of professional advisers who can provide expert advice in relation to points 1 and 2 it is the management of salary sacrifice schemes where Sprite can provide a real advantage over an in-house option. The charging structure for managing salary sacrifice schemes is based on the particular requirements of our customer, however, typical costs are based on a small up-front investment followed by a per payslip charge, either weekly or monthly.