Employee Benefits News: The surprising benefit of tech salary sacrifice

You might think that we’re all pretty tech-savvy – with homes jam-packed full of devices and screens. In part – that’s true. Data from MISCO/Microsoft, which show that a typical UK household has on average up to ten devices, with six connected to the internet and this is expected to grow to 19 devices per household by 2020. So when it comes to salary sacrifice, is there any point in making an investment in home technology – or has that ship sailed?

A strong demand for tech 

Interestingly, Let’s Connect, a provider of home technology salary sacrifice schemes and part of Personal Group plc has suggested that as well as being fully compliant with new HMRC rules on salary sacrifice – that the brand continues to see strong demand from customers for a surprising reason – learning.

Learning is key 

In a survey* conducted as part of the consultation with HMRC, Let’s Connect found that salary sacrifice schemes which enable employees to buy home technology products can play a vital role in closing the digital skills gap. It does so by supporting education, improving IT skills and providing access to technology to those who otherwise may not afford to do so. This demand for technology is supported by

One of the problems that the scheme addresses is the increasing cost of new technology devices and lack of affordability in lower paid sectors and jobs. Enabling lower paid employees to access new technology in an affordable way is a major benefit to them and their employers.

According to the survey: 
· 70 percent said that access to a home technology salary sacrifice scheme has helped them or their family improve their IT skills;

· 89 percent of employees said they would not have purchased the equipment elsewhere, as they could not afford to buy it outright;

· When asked to give the reasons for taking part in the scheme the top answers were:

  • It is paid directly from salary
  • It helps spread the cost of major purchases
  • It saves money on high street prices

· 92 percent of participants are basic rate tax payers; and

· 83 percent of employees said they would participate in a home technology salary sacrifice scheme again.



It seems that salary sacrifice remains an integral and popular component of a holistic employee engagement strategy bringing together employee services, benefits and insurance products. Let’s Connect’s offering is fully compliant with the new HMRC rules and provides home technology salary sacrifice schemes to a number of businesses across a broad range of public and private sector organizations, the largest having around 140,000 employees.

Steve Prevett, UK Sales and Marketing Director of Let’s Connect added: “Salary sacrifice remains an effective way for employers to reward their employees’ contribution and for employees to advance their own skills. Despite recent legislation changes, salary sacrifice schemes remain as popular with both employees and employers alike, particularly amongst Millennials and Generation Z. We are pleased that the Government, after months of uncertainty, have clarified their position and through the new legislation, continue to support salary sacrifice.

“Technology has become a fundamental part of everyday life but there is still a significant digital skills gap in the UK – we are currently lagging behind many of our European counterparts and rank only as the 16th most productive country in Europe. Salary sacrifice schemes have the potential to increase productivity through digital upskilling, increased education and improved well-being.”

Don’t forget!

Salary sacrifice schemes work by enabling employees to agree to sacrifice or ‘exchange’ their pre-tax salary in monthly instalments in return for the Home Technology package of the employees’ choice.
Following the ratification of the Finance Bill in April this year 100 percent of tax must be charged to employees from April 2017 over the period of their agreement, although employees do make National Insurance savings on the total amount sacrificed.

Other HMRC changes include:
· Smartphone benefits attract a benefit-in-kind tax since April 2017;
· National Insurance savings continue for employees, with further pension contribution savings for the English/Welsh NHS; and
· Same benefits for employees such as easy, affordable monthly payments and no credit checks.

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