BUSINESSES are missing out on thousands of pounds of potential savings in National Insurance contributions, according to Preston-based financial advisory group, Taylor Patterson.
The firm is urging SMEs across the region to cut their National Insurance bills by considering salary exchange, a Government approved scheme, to offset the cost of auto enrolment.
The introduction of workplace pensions legislation requires employers to auto enrol eligible employees into a suitable, qualifying pension scheme, creating additional expense for companies and employees alike. With most SMEs due to reach their implementation dates in 2014 and 2015, Taylor Patterson is urging companies to explore options for managing the financial implications of workplace pensions through schemes like salary exchange.
Paul Jackson, Employee Benefits Manager said: “Many employers do not realise that the hard costs of establishing and running a compliant auto enrolment pension scheme can be offset by a simple and effective payroll adjustment, known as salary exchange. Unfortunately, many advisers consider salary exchange to be too complex or outside of their remit, but the feedback from our clients that have taken this option is that it can be implemented easily and provides a win/win outcome for both the company and its staff.”
Salary exchange is a procedure that employers can offer to employees who are members of their pension scheme and in essence results in a reduction in National Insurance contributions for both the employer and the employee.