Flexible benefits schemes ― an overview

Produced by Tolley in association with Robert Woodward
Employment Tax
Guidance

Flexible benefits schemes ― an overview

Produced by Tolley in association with Robert Woodward
Employment Tax
Guidance
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An introduction to flex schemes

A flexible benefits (‘flex’) scheme allows an employee some degree of choice over the benefits included in their remuneration package. Such a scheme may incorporate salary sacrifice arrangements, under which the employee agrees to give up an entitlement to cash remuneration in return for benefits. However, the terms are not synonymous ― a flexible benefits scheme need not involve salary sacrifice, and salary sacrifice may relate to one or several benefits.

Employers may offer voluntary benefits which employees choose and pay for themselves, commonly through deductions from net pay. These may be offered alongside employer-funded benefits and salary sacrifice options within the same scheme. For benefits purchased from net pay, the attraction may be access to employer-negotiated discounts, convenience and a wider choice of benefits, rather than tax or national insurance savings. The employee’s taxable cash remuneration is not reduced for such benefits.

This guidance note sets out the basics of how a flex scheme might work, alongside the usual steps involved when implementing a successful scheme. A number

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Robert Woodward
Robert Woodward linkedinicon

Employment Tax Manager at Frank Hirth plc


Robert is an expert in UK employment tax matters for employers with UK based employees, including UK employees working overseas, and overseas employees coming to the UK. He has extensive experience of advising clients with regards to PAYE matters, employee benefits and social security as well as employment related payments outside the payroll functions such as termination settlements and payments to consultants and other non-payroll labour.After graduating in Politics and Law from the University of Southampton, Robert started his tax career at HMRC as an employer compliance officer undertaking enquiries into employers' expenses and benefits systems before moving into a large international practice and then into the Big 4. Here he assisted with tax investigations, flexible benefits planning, employment tax compliance and international social security.Robert has presented to various audiences and has had a number of articles published in various magazines on employment tax matters.Robert is a fully qualified member of both the Association of Taxation Technicians (ATT) and the Chartered Institute of Taxation (CTA).

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