Wingate Listed in the ‘Top 100 Financial Advisers’ for a 2nd Year in a Row

We are delighted to announce that Wingate has been listed as one of the ‘Top 100 Financial Advice Firms’ for the 2nd year in a row. This substantial recognition is published in the FTAdviser which is one of the most recognised accreditations in our industry.

The achievement is a direct reflection on the level of dedication our team places on helping employers deliver highly valued benefit propositions for their employees alongside health, wellbeing and financial education.

We were one of the highest placed firms specialising in Employee Benefits. Typically, recognition had been given to much larger companies. However, over the last few years the FTAdviser has changed the way in which the list is curated, paving the way for more specialist companies to gain a place on this esteemed shortlist.

Upon accepting the award, Ben Clarke (Managing Director at Wingate) said:

“At Wingate we strive to improve our services year on year so that our clients continue to benefit from our care and commitment. We are very proud of the work our employee benefits team deliver and the results that are being seen by our clients.”

Learn more about Wingate here or contact us for a no obligation consultation today.

What is salary sacrifice?

Many employers give staff the option to swap a part of their wage in return for a non-cash benefit. As a result of having a lower salary, employees pay less income tax and make lower National Insurance contributions. Likewise, employers save on National Insurance as this is linked to salary.

Why is salary sacrifice under threat?

The more non cash benefits provided via salary sacrifice arrangements the less tax is collected by HMRC. The extent of this lost tax is very difficult to track because firms don’t have to report exactly how much tax they and their employees save but the changes are expected to result in £1bn of additional HMRC revenue over 6 years.

Which benefits are to be cut and which are to be protected from the changes?

Cut

Company cars

Work-related training

Car parking near your workplace

Gym memberships

Health screening checks

Mobile phones, Computers and tech

Will-writing services

Gadget insurance

Group Life Assurance & Group Income Protection via Flex Benefit Scheme

Professional Fees & Subs

Protected (in a bid to encourage take up)

Pension contributions (the largest cost to HMRC in this area) and Pensions advice

Childcare vouchers,

Cycle-to-work

Ultra-low emission cars (75 co2 and below)

N.B. Intangible benefits (buying and selling holiday) are not included in these changes 

When will changes be introduced?

6th April 2017

N.B. Any arrangements in place before this time will be protected for a year (until 5th April 2018). Long-term agreements for cars, accommodation and school fees will be protected until 5th April 2021.

Are all the tax benefits being removed from the non protected arrangements?

The Government is scrapping relief on income tax and employer NI contributions.

Employees can still save their NI.

Will the affected schemes still offer any benefits once the new rules apply?

Yes, salary exchange schemes can still to continue to offer benefits to employees such as:

  • Employee NI saving
  • Low cost to employee (Corporate Purchasing Power)
  • Streamlined administration
  • Cost deducted via payroll
  • No underwriting

Actions

  1. Identify the elements of your current salary sacrifice scheme that will be affected.
  2. Calculate the financial impact this may have on your business.
  3. Consider the psychological and financial effect the changes could have on your employees.
  4. Help your team to understand the changes by being open and transparent, encouraging questions and dialogue.
  5. Capitalise on the short timeframe and encourage employees to sign up to any existing salary sacrifice schemes that are popular before April 2017.
  6. Consider easing financial loss by introducing other financial solutions for example voluntary benefits, where employees can make savings on everyday expenses.

If you would like to discuss these changes and the potential impact on your benefits with one of our strategic benefit consultants please contact us on 01883 332260 or at info@wingatebs.com

The new regulations, that confirmed the change of dates from which the auto enrolment minimum contribution increases need to occur, have now been passed by Parliament.

The minimum required contributions and effective dates are detailed below:

Phasing dates Qualifying Earnings Basis Tier 1 Tier 2 Tier 3
Staging Date – 5th April 2018 2% (of which 1% employer) 3% (of which 2% employer) 2% (of which 1% employer) 2% (of which 1% employer)
6th April 2018 – 5th April   2019 5% (of which 2% employer) 6% (of which 3% employer) 5% (of which 2% employer) 5% (of which 2% employer)
6th April 2019 onwards 8% (of which 3% employer) 9% (of which 4% employer) 8% (of which 3% employer) 7% (of which 3% employer)

 

For more information or advice on Auto Enrolment please contact your usual Wingate team or call / email us on:

Tel: 01883 332260

Email: info@wingatebs.com

 

This information is based on our current understanding of legislation which can change without notice.  Professional advice should always be sought prior to making any changes to your arrangements or deciding on any action in this respect.

What is it?

Automatic re-enrolment occurs every 3 years and repeats the duties you carried out on your Staging Date. You must ensure all your eligible staff who are not active members of a Qualifying Workplace Pension Scheme (QWPS) with at least the minimum levels of contributions are re-enrolled back into your scheme.

 What you must do

  • Choose a re-enrolment date which starts three months before and ends 3 months after the 3rd anniversary of your Staging Date. For example, if your original staging date was 1st January 2014 you can elect a re-enrolment date of anywhere between 1st October 2016 & 31st March 2017
  • You don’t need to inform The Pensions Regulator of your re-enrolment date
  • You must write to the eligible staff individually, within six weeks of your re-enrolment date to tell them how re-enrolment applies to them
  • You must complete a new declaration of compliance no later than 2 months after your re-enrolment date

 What you cannot do

  • Ignore it
  • Operate postponement on re-enrolment i.e. you must enrol people on your re-enrolment date.

Who you have to re-enrol

Yes: Eligible staff who more than 12 months before your chosen re-enrolment date have either:

  • Opted Out
  • ceased active membership of the QWPS or
  • stayed in your QWPS but the contributions are less than the minimum required under the QWPS rules

No: Anybody who:

  • Has Opted Out or ceased active membership within 12 months of your re-enrolment date
  • Has given in their notice to end their employment or been given notice of dismissal
  • Has Primary, Enhanced, Fixed or Individual protection from tax charges on their pensions
  • Is a Director of the employer
  • Is a Partner of the employer where it is a Limited Liability Partnership

Hopefully your payroll system will automatically highlight most if not all of these people for you but you should check this well in advance of your re-enrolment window.

Opting Out

There is a one-month window in which re-enrolled employees can opt out of the scheme.

Next Steps

If you are nearing or within 9 months of the 3rd anniversary of your Staging Date please contact your usual Wingate contact or call / email us at:

Tel:        01883 332260

Email:   info@wingatebs.com

 

This article is a basic introduction to the subject and is not meant to be exhaustive document and should be treated as such. It is based on our current understanding of legislation which can change without notice.  It is not a recommendation for changing any existing arrangements and professional advice should always be sought prior to making any changes to your arrangements or deciding on any action to be taken.

We have received an increasing number of questions regarding the Chair’s statement for trust based Occupational Pension Scheme. Below are brief answers to some of those initial questions. It is not designed as an exhaustive briefing document and for further detailed information and specific advice please contact us on 01883 332260.

Who has to comply? Trustees of Trust Based money purchase (defined contribution) Occupational Pension Schemes

A Chair of Trustees must be appointed

When? Existing schemes within 3 months of 6 April 2016. New schemes within 3 months of the date the new scheme is established.

Who can be appointed as chair? The following:

  • An individual who is a trustee of the scheme.
  • A professional trustee body which is a trustee of the scheme.
  • An individual who is a director of a non-professional corporate trustee company.
  • A director of a professional trustee body.

How? Register on The Pensions Regulator’s online website

Key duties?  Signing Chair’s statement

A Chair’s statement must be produced

When? Within 7 months of the end of each scheme year.

For those schemes whose year end was before 5 April 2015 the scheme year will run from 6 April 2015 until scheme year end, then as above.

For schemes whose year end starts from 6 July 2015 the deadline for submitting the statement has already passed.

What are the key items the statement must contain?

Default arrangements

  • Statement of default investment strategy
  • Description of any review of the default arrangements and any changes undertaken as a result
  • Where no review was undertaken, the date of the last review

Charges and transaction costs

  • The charges and transaction costs applicable to the default investment
  • The range of charges and transaction costs applicable to any other investment fund options
  • Confirm the extent to which the charges and transaction costs represent good value for the members.

Core financial transactions

A description of how the requirement to process core financial transactions (e.g. contributions, transfers in and out, payments to members) promptly and accurately has been complied with.

Trustee knowledge and understanding

  • Confirm how the requirements for knowledge and understanding have been met
  • Confirm how the trustee’s combined knowledge and understanding together with the advice available to them enables them to meet their duties

 

This article is not meant to be exhaustive and is based on our current understanding of legislation which can change without notice.  It is not a recommendation for changing any existing arrangements and professional advice should always be sought prior to making any changes to your arrangements.

 

The Government has announced with effect from 6th April 2017 that they are reducing the Employment and Support Allowance (ESA).

ESA is paid to individuals by the state if they are unable to work due to illness or injury after they have been absent for 28 weeks. There are currently three levels of benefit, paid weekly:

  1. Basic Benefit paid from week 29 to 41:  £73.10
  2. Basic Benefit + Work Related Activity Component paid from week 42 for up to 39 weeks:  £73.10 + £29.05 = £102.15
  3. Basic Benefit + Support Allowance paid from week 42 up to State Pension Age:  £73.10 + £36.20 = £109.30

With effect from 6th April 2017 the Work Related Activity Component will be removed. Any employee on sick leave from late September 2016 (becoming ESA claimants 28 weeks later) will only receive the Basic Allowance or Basic Allowance plus Support Component.

There is no change to the benefit paid to people eligible for the Support Component.

This means any employee eligible for the Work Related Activity Component will receive £1,511 per annum less from the State from April 2017.

Many Group Income Protection policies insure the benefit less the State Benefits on the insured benefit. This reduces the premium cost to the employer as it is assumed all claimants will receive the full Basic Benefit and the Work Related Activity Component. If this offset position continues it means the Group Income Protection provider will be insuring an additional £1,511 per annum of benefit the State was previously providing. This additional insured benefit will need to be paid for meaning there is likely to be an increase in the premium charged for the policy.

There are options available to keep the premium cost neutral which your Wingate adviser will discuss with you at the time of your scheme’s annual review but if you would like to discuss this beforehand please contact your usual adviser on 01883 332260.

 

This article is not meant to be exhaustive and is based on our current understanding of legislation which can change without notice.  It is not a recommendation for changing any existing arrangements and professional advice should always be sought prior to making any changes to your arrangements.

In recent years Excepted Group Life Policies have become more popular and as such the following may be useful in order to provide a basic comparison between these and the traditional Registered Group Life schemes. It is not meant to be exhaustive and is based on our current understanding of legislation which can change without notice.  It is not a recommendation for changing any existing arrangements and professional advice should always be sought prior to making any changes to any such arrangements.

  Registered Group Life Scheme Excepted Group Life Policy
Basic requirements Established using a trust deed and then registered with HM Revenue & Customs

 

Once registered, a Group Life Assurance policy is set up

A Discretionary Trust deed is established the only asset of which will be the excepted group life policy

The policy must meet certain conditions to qualify as an excepted policy which are:

–  A minimum of 2 lives must be covered
–  It must provide for a capital sum payable on the death of a person included in the policy before age 75
–  The same method is to be used for calculating the capital sum payable for all persons included in the policy
–  It cannot accrue a surrender value
–  No other benefits can be payable other than the capital sum
–  The capital sum must be paid at the discretion of:
a)   An individual or charity beneficially entitled to them, or
b)   A trustee or other person acting in a fiduciary capacity who will ensure the sums are paid to the beneficiary

Tax avoidance is not the main purpose or not one of the main purposes, for which a person is at any time:

a)   A holder of the policy, or
b)   A person beneficially entitled under the policy

Minimum number of lives at outset 2 2
Who can be covered? –   Employees of an employer

–   Equity partners if the partnership also has employees that are covered

Anyone can be included but often insurance companies require a link via employment or partnerships
What benefits can be provided? A lump sum and/or dependant’s pension payable on death only A lump sum only which must be the same for all members, payable on death only
Lifetime allowance (LTA) charge –    Lump sum and retirement pensions paid are assessed against the LTA

–    Benefits that exceed the LTA are subject to a tax charge

–    Death in service pensions do not count towards the LTA nor are assessed against the LTA

The LTA does not apply
Income tax –    Lump sum benefits are not subject to income tax

–    Dependents pensions treated as earned income

Lump sum benefits are not subject to income tax
Inheritance tax Benefits are not subject to Inheritance Tax Schemes are subject to the normal inheritance tax rules that apply to discretionary trusts further details of which can be provided on request
Protection from the LTA Protection may be lost in certain circumstances eg if a relevant benefit accrual is made in a registered pension scheme or if an individual joins a new registered pension scheme. Different rules apply for each form of protection further details of which can be provided on request Membership of an excepted policy has no affect protection
Tax avoidance Not applicable as schemes obtain tax privileges through registration Tax avoidance must not be the main purpose, or one of the main purposes, for the policyholder or one of the persons entitled to benefits under the policy

 

Below are some of the results of a recent independent employee benefit survey of over 300 employers which we thought may be of interest to you.

Many of the answers highlight the value of an effective online benefit & communication platform, something we can provide via our Wingate PlusYou product. Wingate PlusYou is a straightforward, effective and surprising low cost online benefit platform which we can demonstrate face to face or online and usually provide a no obligation quote for within 24 hrs.

For further details of our Wingate PlusYou product please contact one of our employee benefit advisers on 01883 332260 or at info@wingatebs.com .

Survey Answers

  • 74% of respondents enable staff to contribute to their defined contribution pension scheme via a salary sacrifice arrangement
  • 81% of respondents offer employee benefits because they are an effective retention tool
  • 76% do it as they are an effective recruitment tool
  • 72% do it to support employee health and wellbeing
  • 61% of respondents name the desire to be seen as an employer of choice as a key issue shaping their organisations benefits strategy

 

  • 44% of respondents fund their employee benefits offering solely themselves whereas 49% part fund their offering
  • 50% don’t envisage this funding situation to change

 

  • From the respondents, here is a breakdown of salary sacrifice arrangements offered:
    • 93% offer Childcare Vouchers
    • 78% offer Cycle to Work Schemes
    • 72% offer pension
    • 37% offer Give-As-You-Earn/payroll giving
    • 36% offer holiday trading
    • 25% offer Health Screening
    • 22% offer Gym Membership
    • 17% offer cars

 

  • On the Group Risk side of things
    • 84% offer Death In Service
    • 53% offer Income Protection
    • 36% offer Critical Illness
    • 30% offer Personal Accident Insurance

 

  • On the Health & Wellbeing side of things
    • PMI is offered in 71% of cases
    • EAP in 68% of cases
    • Health Screening in 50% of cases
  • In terms of measuring engagement levels, 69% of respondents do this via a staff survey

Our unique Key Person facility means you can obtain Life Insurance for the key people within your business WITHOUT THE NEED FOR MEDICAL UNDERWRITING or any declaration of hazardous activities. 

This facility is designed to avoid key persons spending time completing detailed forms and attending medicals when they would prefer to be focusing on the business

Provided the person(s) to be insured meet the eligibility conditions* you can secure £250,000 of death cover per individual through the completion of a simple one page application form with fixed premiums based on the person’s age – enabling you to put this important cover in place immediately.

 Key Features

  • Cover of £250,000 per person without the completion of any medical underwriting or consideration of hazardous activities, factors which delay the process of obtaining cover
  • Multiple key persons within the same company can be insured under a single policy
  • The policyholder is the business, which will receive payment of the lump sum on the death of a named Key Person
  • Policies are for a 3 year term and can be extended for further 3 year periods
  • Competitive premiums
  • Premiums are paid annually in advance
  • Cover is available under the facility for up to £10,000,000 for each Key Person. However, for cover above £250,000 medical and financial underwriting will be required

*Eligibility conditions:

  • Cover is available for individuals with UK contracts of employment for companies
  • The Key Person(s) must be ‘actively at work’ on the start date of cover, working normal contracted hours in permanent paid employment and not have suffered from an accident or illness which prevented them from carrying out their duties for 10 or more consecutive days in the previous 12 months.

It’s as simple as that, provided these conditions are satisfied cover can commence immediately.

£250,000 of Life Insurance for key personnel via completion of a one page application, with no medical underwriting or details of hazardous activities

For further details and a quote please contact:

Jon Bird

T:   01883 332269

E: jon.bird@wingatebs.com

In a move that could increase the Treasury’s annual revenue by up to £1.75 billion, the Chancellor announced in the Summer Budget that the standard rate of UK Insurance Premium Tax (IPT) will increase from 6% to 9.5% from 1st November 2015.
IPT is a tax on general insurance premiums and there are two rates: the standard rate applying to products such as home and contents, motor and private medical and cashplan insurance.  There is a higher rate of 20% that applies to travel, mechanical/electrical appliance insurance and some specialist vehicle insurance, although this has not been affected by the change.

The new standard rate will be due on premiums received on or after 1st November 2015, except where insurers operate a special accounting scheme. In that case, the new rate is only applied to premiums relating to risks covered by the terms of a contract entered into after 1st November 2015; however, from 1st March 2016, the new rate applies to all premiums, regardless of when the contract was entered into.

Insurers are concerned about whether this represents part of a gradual move towards aligning the IPT rate with the VAT rate of 20%, something that is quite common in other EU member states.

In terms of the affect of this change on employers, we expect most medical and cashplan insurance providers to simply add the additional tax to their normal rates, meaning that most clients with these schemes should expect to be offered renewal terms with a larger than usual increase at the next renewal.  In turn this will increase an employee’s taxable benefit as IPT is included in the employee’s P11D liability figure. It is therefore essential that all options are considered, including possibly potential alternative insurers and policy structures to ensure you minimise the affect of the IPT increase wherever possible.

Also, if you have been considering establishing a new medical insurance or cashplan scheme for your employees you may wish to consider implementing these prior to 1st November 2015 whilst IPT at it’s current lower rate.

If you would like a no cost, no obligation review of your existing benefit schemes and/or wish to discuss the options around establishing a new employee benefit scheme please contact us on 01883 332260.

All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change. This is information is not provided as advice or a recommendation.