The facts
What is a computer salary sacrifice scheme?
An arrangement whereby an employer buys a computer from a computer scheme provider and then loans it to an employee, typically via a flexible or voluntary benefits scheme. The employee repays the cost through their gross pay.
Where can employers get more information?
Information about how computer salary sacrifice schemes work can be found on provider websites. HM Revenue and Customs’ website gives more details on the tax treatment of computers.
Who are the main providers??
Providers include Avinity, Clarkwood Enterprise, Computershare Salary Extras, Computingscheme, Employee Choice, Exertis Employee Benefits, Let’s Connect, P&MM Employee Benefits and Stormfront.
North Yorkshire County Council, for example, offers staff access to tablets and laptops through its Everyday Benefits salary-sacrifice-based platform.
Employees can pay for their chosen gadget out of their gross pay and make tax and national insurance (NI) savings in the process.
Basic-rate taxpayers could expect to save up to 8% of income tax and 12% in NI. Higher-rate tax payers can save 16% and 2% respectively.
Technically, employers own the computers, which they loan to their employees, who are then liable to pay benefit-in-kind tax.
The main attraction of computer salary sacrifice schemes is that these enable staff to spread the cost of computing equipment across monthly payments without having to obtain credit.
Most scheme providers do not charge for launching a scheme, because they generate profit from selling related accessories and insurance cover, but employees’ orders may be subject to administration and delivery fees.
Some employers choose to offer computers to staff via a straightforward discount scheme, rather than through a salary sacrifice arrangement.
Although there are no tax and NI savings, these arrangements allow for shorter repayment periods and open up the benefit to low-paid workers who cannot participate in salary sacrifice.
Like all benefits, computer salary sacrifice schemes need to be communicated effectively to ensure staff understand: the impact the benefit has on their take-home pay; the tax treatment and benefit-in-kind liability; and how the hire and payment agreement between them and their employer is regulated.
Employers should also keep track of and communicate market trends, such as the rising popularity of bring-your-own-device (BYOD) schemes, which are rivalling computer salary sacrifice schemes.
This is being driven by an increase in flexible-working practices within many organisations.
The major advantage of BYOD schemes for employees is that they purchase and own their computer, which they then use at work, rather than having to loan it from their employer.
But a major drawback for employers is IT security, hence why the government updated its BYOD guidance for employers in November 2014.
Statistics
- 6% of respondents offer computers to staff on a voluntary basis.
Source: The Benefits Research 2014, published in May 2014.
- 6% of employers introduced computers for staff in 2013, which is twice the percentage (3%) in 2012.
Source: The Benefits Research 2014, published in May 2014.
- 16% of employers plan to add computers or tablets for home to their flexible benefits scheme.
Source: Employee Benefits/Towers Watson Flexible benefits research, published in March 2014
