T&S planning is a relatively straight forward opportunity as long as the compliance / administration aspects are fully managed on an ongoing basis.

The plan firstly surrounds identifying all aspects of travel and subsistence which could be reimbursed to an employee tax free and comparing this to the existing company policy. Where expenses which could be paid free of tax and NIC are not being provided, the remuneration of the employee is adjusted to allow such expenses to be claimed.

In return for these additional expenses, the employee will enter into a salary sacrifice arrangement whereby gross pay is reduced effectively "swapping" pay (which is charged to both tax and NIC), for business expenses (which can be paid free of tax and NIC).

The result is the employer makes savings in relation to Class 1 NIC contributions. There is also an increase in take home pay for the employee in not having tax and NIC deducted from these payments.

Overnight allowances

In addition to daily T&S allowances it may be possible in time to introduce or supplement overnight allowances where mobile employees are required to stay away.

Maximising the Opportunity

Many employers recognise that the savings achieved by employees significantly outweighs the benefits to the employer. As a result, it is increasingly common for employers to seek to share the saving with employees in a more equitable manner.

What Level of Savings can be achieved?

Actual savings will depend on the number of qualifying employees and the level of expenses already provided. It is not uncommon however for a business with 250 qualifying employees to utilise savings in excess of £400,000 per annum.

For further information please contact the Cobia team on 0845 226 0580 or email info@cobia-uk.com