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Travel & Subsistence Planning . Outline of the opportunity; What this means in practice; Quantifying the financial benefits; Outsourced administration; and Compliance aspects. Outline of the opportunity .

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Presentation Transcript
slide2

Travel & Subsistence Planning

  • Outline of the opportunity;
  • What this means in practice;
  • Quantifying the financial benefits;
  • Outsourced administration; and
  • Compliance aspects.
outline of the opportunity
Outline of the opportunity

Mobile employees who work at different locations during the day incur expenses which can usually be paid free of tax and National Insurance by the employer.

Most employers within your sector pay some expenses but not as much as the tax rules actually allow.

Travel & Subsistence planning is a straight forward concept. Employees “swap” pay (which has tax of 20% and NIC of 12% deducted) for increased amounts of business expenses (which are paid without deductions of tax and NIC).

outline of the opportunity1
Outline of the opportunity

The result is:

The employee takes home more each month;

The employer pays less in National Insurance;

Overall business costs reduce, potentially providing scope for greater flexibility.

slide5

Existing Position

£2000

Gross pay

Unused Tax Free Expenses

£300

slide6

Revised Position

Gross pay

£1700

Expenses

£300

slide7
HMRC Brief 24/09

Benchmark Scale rates for day subsistence

One meal rate (Five hour rate) – A rate of £5 may be paid

Two meal rate (Ten hour rate) – A rate of £10 may be paid

Approved Mileage rates

Cars & Vans 45p (First 10,000 business miles)

Motorcycles 24p

Bicycle 20p

What this means in practice

slide8

What this means in practice

Some basic assumptions

Mr X Ample earns £2,000 gross per month and is a mobile worker within a geographical area.

He is usually out and about around his area for up to 8 hours per day.

He lives within his area and travels a total of say 22.2 miles per day

22.2 miles x standard HMRC travel allowance @ 45p per mile

£5 standard HMRC subsistence allowance for 5+ hour shift.

= £15 per day

= £300 a month (20 days)

slide9

Current Payslip

Total cost to Employer: £2,194.71 (inc. £194.71 ER NI)

slide10

Revised Payslip

Total cost to Employer: £2,151.31 (inc. £151.31 ER NI)

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What this means in practice - Employer

Current Total Cost: £2,194.71

Cobia Total Cost: £2,151.31

Saving per employee: £43.40

Annual saving for a 100 employee business £43.40 x 100 x 12mths

= £52,080.00

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What this means in practice - Employee

Current Net: £1,557.04

Cobia Net: £1,653.04

Benefit to employee: £96.00

Annual benefit for 100 employees: £96.00 x 100 x 12mths

= £115,200.00

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The employee currently receives the majority of benefits, and the employer may decide to share in this benefit.This is typically done through the introduction of an amendment in the salary sacrifice working.For instance, the employer may decide to share 25% of the potential benefit with the employee whilst holding on to 75%.

Enhanced Savings

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What this means in practice - Enhanced

Current Total Cost: £2,194.71

CobiaSPLIT Total Cost: £2,079.31

Saving per employee: £115.40

Annual saving for a 100 employee business: £115.40 x 100 x 12mths

= £138,480.00

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What this means in practice - Employee

Current Net: £1,557.04

CobiaNet: £1,581.04

Benefit to employee: £24.00

Annual benefit for 100 employees: £24.00 x 100 x 12mths

= £28,800.00

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Employment Law

HMRC Compliance

Systems & Management

Outsourced Administration

slide17
Review of Contract of Employment, Employee Handbook etc. Amendments developed in line with the expense programme

Consultation Process with employees will be co-ordinated by Cobia Implementation Team

All supporting documentation is provided by Cobia:

HMRC Dispensation

Employee Communication

Bespoke Expense Policy

Eligibility Criteria in line with granted dispensation

Continued HR Support to manage transient workforce

Employment Law

slide18
Cobia advise and assist in all matters regarding UK employment taxation

Former HMRC personnel

Former “Big 4” personnel

Not just our say so:

“This ability by COBIA to review the eligibility is really impressive and adds to our confidence that the scheme run for your staff will prove to be realistic and compliant.”

Large Business Service, Employer Compliance

Compliance Aspects

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Cobia work with a variety of systems partners to advance the efficiency in data sharing between Cobia and client

Cobia provides a full or partially managed outsourced Payroll service

Cobia will fully manage the Compliance of your scheme right down to each individual employee

Cobia will focus on administrative controls and documented evidence to support any future PAYE risk assessment.

Systems and Management

slide20
Employee Benefits

Increased Net Pay

Employer Benefits

Increased operating margin through reduction in NI Contributions

No impact on working capital

Fully outsourced solution

Employment Law is compliant

Big 4 level compliance & risk management

Summary

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Interested in hearing more?

Cobia has developed a successful structure which allows you to determine the level of savings available to your business without investing in significant costs.

Based on a detailed review, we will provide a summary document and follow up meeting which not only outlines the opportunity but will also detail the anticipated financial savings. This will allow you to make an informed, business decision based on genuine data. The cost of this process is dependent on the size of your business:

Number of Employees Cost (£ plus VAT)

0 – 150 200.00

151 – 500 350.00

501 – 750 500.00

751 – 1,000 650.00

1,001 + Priced on Request

slide22

Contacts

Steve Wiles Managing Director 0845 226 0580

07879 882300

steve.wiles@cobia-uk.com

James Doyle Commercial Director 07967 339364 james.doyle@cobia-uk.com

Anthony Bennett Group Tax Director 01582 390007 07768 702164

anthony.bennett@cobia-uk.com