Company Loans
Loan schemes either provide for modest sums to be lent interest free or for more substantial sums to be loaned at favourable interest rates. Small sums tend only to be loaned on a compassionate basis where there is personal hardship. Larger loans tend to be for defined purposes such as home improvements or car purchase, but may come without any strings attached at all. Repayments are normally made by regular deductions from salary on a basis specified or agreed between employer and employee. The benefit is more common in the finance sector. The taxable threshold for loan benefits should be monitored
The high cost of commuting in to London and other major conurbations has led many employers to offer interest-free loans for annual season tickets. Such loans normally fall below the taxable threshold for loan benefits and are repaid in instalments over the year.
Subsidized mortgages are a very substantial benefit, especially for those who have to buy property in high-cost housing areas. The benefit is mainly confined to the finance sector and is usually provided by subsidizing interest payments on mortgages up to a given price threshold - often a multiple of salary. Where given, this benefit tends to be provided for all employees subject to age, grade and service requirements. Service requirements may, however, have to be dispensed with if they cause recruitment difficulties for staff categories already likely to have subsidized mortgages with other employers. The amounts available for subsidy normally rise either with seniority or salary level.
Housing assistance can also be given in the form of bridging loans and a guaranteed selling price (usually based on averaging of current valuations), especially for employees who move at company request and who cannot sell one house before they have to move into the house they buy near their new place of work.
Companies recruiting managers and specialists from other parts of the country, or requiring employees to move, normally expect to pay the costs of removal. They also expect to compensate to some extent for the personal upheaval involved as well as paying for legal and agents' fees and the costs of moving their possessions, buying new carpets and curtains and even school uniforms. Following the March 1993 Budget, the Inland Revenue limits tax-free relocation assistance to £8,000. Companies can use this to the full or exceed it on a taxable basis if they believe this is necessary to induce an employee to make a move essential to business needs to an area not of their choice. Packages can either be drawn up individually or be controlled by set guidelines. Several specialist consultants offer assistance with the property side of relocation.
Where a company has products or services which can be offered to employees at a favourable discount, this is normally much appreciated. Such schemes can run from free sweets or a fixed weekly allowance to employees in sweet factories, to low-cost second and third cars for people working in car manufacturing. Some organizations, unable to give discounts on their own products, negotiate discounts for their employees from suppliers. These 'affinity benefits' are growing into a substantial industry. Trade unions are also active in the area of negotiating discounts as a means of attracting and retaining membership.
Fees for recognized professional bodies such as the Institute of Chartered Accountants or the Chartered Institute of Personnel and Development may be refunded.
0 comments:
Post a Comment