Can hybrid working boost your business?

The pandemic brought a lot of changes to our businesses, some good and some bad. One that has continued to be a topic of conversation is the desire for more people to be able to work some, or all, of the time from home.

If your business requires people to be onsite – such as a coffee shop, a factory, or a dental practice, for instance – your staff would have little choice about where they are working. But for administrative roles, or those that could be done from anywhere in the world with a phone, a computer and an internet connection, the argument for getting people to come into the office is a harder one to win.

Employers reluctant to allow workers free rein

Some employers are reluctant to allow their employees to work from home, perhaps because they fear they will get less done there than they would in the office. But various pieces of research show that allowing employees more freedom about where and when they work increases productivity rather than decreasing it.

There are fewer distractions when employees work from home compared to the office, and the ability to work as and when it suits them often results in people being more productive than when they are being forced to work specific hours.

A recent report from the ACCA – UK Talent Trends in Finance 2023 – found that the UK is leading the way when it comes to hybrid and remote working.

Jamie Lyon, head of Skills, Sectors and Technology at ACCA, said: “Only one-fifth of respondents in the UK identified as fully office based, with the remaining 80% either adopting a hybrid approach to work or being fully remote. However, globally, the picture is notably different, with over half of respondents being fully office based. And 77% of respondents in the UK feel they are more productive when working remotely.”

Could hybrid working be good for your employees?

Many companies are already allowing some staff to work from home at least part of the time. But if your business isn’t one of them, you may want to consider adding this as an option.

It can provide various benefits, including:

• Being more inclusive for employees who find it difficult to juggle their home and work life around specific office hours.
• Greater productivity.
• Improved employee wellbeing because they have more control over their working and home life.
• Greater flexibility in allowing employees to change their approach based on what the business needs at a particular time.

However, not every employee is keen to work from home. Some people prefer to be in the office full time as they thrive in this more social environment. So, bear this in mind when you are creating hybrid working policies.

Are there other benefits to your business?

One other major benefit to the business could be the reduced amount of office space needed. If your company owns its office building, you may be able to let out part of that building to another business to benefit from additional income. Alternatively, if you use rented office space such as WeWork, you may be able to reduce the size of the office you need there and cut your monthly outgoings.

You may also consider offering employees a one-off payment to set up their home office to ensure they don’t end up with work-related injuries, such as repetitive strain injury (RSI) from having a poor posture at work because they are using the wrong type of chair or desk and so on. Any saving you can make on office space could be used to offset this payment, and remember it would also be tax deductible.

We can help you

If you are considering hybrid working as part of your business strategy, then please get in touch with us and we can help you understand the benefits and costs that could be involved.

How you can benefit from salary sacrifice

Salary sacrifice is something you may have come across before but not fully understood. After all, why would anyone want to voluntarily give up some of their salary? The reality is that, in some instances, using salary sacrifice to get alternative benefits can reduce your tax bill considerably and make buying the things you would buy anyway much cheaper.

Employers have the ability to arrange large discounts if they know a number of employees will take up a specific benefit, because the provider will be able to sell a larger number in one go if the product or service is being paid for through a company payroll.

What can it be used for?

There are many things employers can offer to their employees through a salary sacrifice scheme. Bicycles, bus passes or other transport payments, gym membership and even car parking or laptops can all be offered via salary sacrifice. People can also make pension payments this way.

The main benefit is that by purchasing goods and services through the payroll, the payment is taken from your salary at source which means you don’t pay tax or National Insurance on the amount of money used to pay for these items. For example, a higher-rate taxpayer would save 40% and 2% NI on the amount of money they sacrifice to make the purchase, while a basic rate taxpayer would save 20% and 12% on NI.

If you are keen to get an electric vehicle, using salary sacrifice can be one of the most cost-effective ways to achieve this. Although this is seen as a ‘benefit in kind’, the value applied to electric cars is just 2%, while for petrol and diesel cars it can be as much as 37%.

As the salary isn’t being ‘paid’ to the employee, employers will be able to reduce their NI contributions too, making it a win-win for all.

We can help you meet your obligations

If you are interested in offering salary sacrifice for your employees, or approaching your employer to see if it will offer you a salary sacrifice scheme, then please discuss this with us and we will advise you on how to do this.

Deadline to catch up on National Insurance contributions extended

Anyone with an incomplete National Insurance contributions (NICs) record between April 2006 and April 2016 now has until July 31 to add to their NICs to qualify for a full State Pension after HMRC extended the deadline.

Thousands of taxpayers have incomplete years in their NICs record who could get a higher State Pension if they make voluntary payments to top up incomplete or missing years, according to the Treasury.

The original deadline for voluntary payments to fill any gaps was April 5, 2023, but this was extended after members of the public voiced concerns that this did not give them enough time.

Victoria Atkins, the Financial Secretary to the Treasury, said: “We’ve listened to concerned members of the public and have acted. We recognise how important State Pensions are for retired individuals, which is why we are giving people more time to fill any gaps in their National Insurance record to help bolster their entitlement.”

How would I know if I’m affected?

The easiest way to find out if you have any missing NICs years is to ask for a Pensions Forecast from the Department for Work and Pensions (DWP). The relevant information to get a State Pension forecast, and to decide if making a voluntary National Insurance contribution is the best course of action for you, plus how to make a payment, is available on GOV.UK.

You can also check your National Insurance record, via the HMRC app or your Personal Tax Account. If you aren’t sure how to do this, your accountant will be able to help you. If you choose to make additional voluntary payments, these would be at the existing rates for 2022/23.

NICs to qualify for a full State Pension

To get the full State Pension, you will need to have paid 35 full years of NICs. To get any State Pension, you will need to have paid 10 full years of NICs. If you have paid between 10 and 35 full years of NICs, you will get a proportion of the full State Pension.

This is why it’s important to find out how many full years of contributions you have made. The full State Pension amount is currently £203.85 per week. So, if you had 25 full qualifying years, you would divide £203.85 by 35 and then multiply by 25 to see what you would get. In this example, you would receive £145.61 per week at the current rate.

Remember, you should get advice to see if it is worth making additional voluntary contributions to complete your NICs record. So, speak to your accountant before you make any payments.

Let us help you

Pensions – and especially the State Pension – can be complex to navigate. If you are concerned you haven’t got enough qualifying years for your full State Pension, then please get in touch with us and we will advise you on the best course of action.