Salary Sacrifice Scheme Overview

How Does Cashless Payment Work?

Salary Sacrifice cashless payment for staff restaurants is an opportunity for employers to offer free or subsidised meals to employees, in return for which the employee sacrifices some part of their remuneration; similar to the arrangements under which many employees now benefit from childcare vouchers. Although a subsidised staff catering facility may be “available to all employees” the potential saving does not fall within the definition of a taxable benefit as the value of the subsidy is not (and does not) need to be equivalent to everyone. In the same vein the facility does not need to be used by everyone.

However by issuing a cashless catering card to all employees, the MYRIAD solution enables the benefit of the Salary Sacrifice cashless payment scheme to be managed at an individual employee level with reporting of operational data using a number of criteria including payment purse type and by individual.

Managing the Sacrifice

The success of the cashless payment scheme is reliant on a secure, robust payment cashless management solution that can be accessed by various authorised parties to manage the individual employee’s sacrifice. It maintains a complete audit of all cashless payment transactions to produce the detailed summary and individual reports required to ensure compliance with existing UK Tax legislation.

After seeking the necessary advice the employee nominates an annual sum that they wish to sacrifice in return for the benefit of free meals. They then identify how they would prefer the annual sacrifice to be managed based on their personal preference e.g. by week/month or per year; any additional funds required can be added using one of the other MYRIAD cashless value loading options.

Thereafter the MYRIAD cashless catering solution automatically manages the provision and use of the sacrifice in line with the scheme rules with automated links to both HR and Catering Management Systems.

Where Next?

Any technical reduction in salary clearly has tax and NI implications and may have wider implications on pensions, overtime, bonuses as well as other areas such as payroll, tax & HR; as with any change to employee reward the scheme requires careful planning and implementation to ensure that it is robust from an employment law perspective and has received clearance from Her Majesty’s Revenue & Customs. Each client scheme requires this verification in its’ own right and GiroVend therefore recommend that the necessary professional guidance is sought to ensure that a methodology which minimises the risks, manages all ancillary issues and maximises employee participation is implemented.

With a breadth of experience and depth of knowledge in the design, installation and support of smart card cashless payment solutions GiroVend will conduct an operational survey to identify the requirements and benefits that will be delivered, offsetting the initial investment.

Features & Benefits

Employers

As an employer the introduction of MYRIAD cashless catering to manage the Salary Sacrifice scheme:

• Enables the scheme to be configured to reflect your unique situation
• Links seamlessly with your existing HR/Payroll systems
• Enables the benefit to be offered to all employees
• Increases the cost justification for upgrading your existing cashless system
• Requires no, or little, change to your current service provider contractual arrangements
• Reduces your Tax and National Insurance Payments
• Provides a clear return on investment for new investment
• Increases the usage of the employee catering service facilities
• Reduces cash in the workplace

Employees

As an employee the introduction of MYRIAD cashless catering to manage the Salary Sacrifice scheme:

• Reduces your Tax and National Insurance deductions
• Increases your spending power in the workplace
• Provides a web based audit to track and monitor your spending
• Enables individually managed payments e.g. on a daily, weekly, monthly or annual basis
• Total transparency ~ cardholders have secure access to all aspects of their scheme
• Total security ~ all aspects of the system are via encrypted processes
• Enables additional funds to be loaded via one of the alternative MYRIAD cashless value loading solutions

Service Providers

As a service provider the introduction of MYRIAD cashless catering to manage the Salary Sacrifice scheme:

• Potentially eliminates cash from your employee service operations
• Reduces cost of service operation
• Provides a full audit of all customer activity
• All sales via the scheme are free of VAT
• Guarantees future incomes
• Enables remote, authorised, access to operational reports
• Meets the requirements of the Inland Revenue
• Automatically manages the parameters of the scheme i.e. product availability
• Increases customer patronage
• Provides a clear cost justification for investment
• Enables consolidated management and reporting across multiple client locations
• Requires no, or little, change to your current client contractual arrangements

Frequently Asked Questions

How does Salary Sacrifice work with MYRIAD Cashless?

The MYRIAD cashless catering solution manages the Salary Sacrifice on a simple basis:

• After taking advice the employee chooses to sacrifice a value from their salary to be used for catering service purchases
• The sacrifice/payment is made directly, or retrospectively charged, from the employees gross salary on a periodic basis into the MYRIAD solution
• Employees simply use their card for all purchases - the MYRIAD system manages the parameters of the scheme
• If required, the employee, can add further funds to the card, via onsite MYRIAD loading terminals or via MYRIAD SmartPay
• MYRIAD provides a full audit trail for all transactions and purchases to authorised personnel

How does MYRIAD Cashless work in conjunction with an employee benefits/payroll system?

The MYRIAD cashless catering solution seamlessly links with the Employer’s system, collecting data relating to the individual employees. Thereafter MYRIAD cashless catering automatically manages the use of the fund, as defined by the Revenue, collating reports that can be used for audit purposes

What if the cashless catering scheme stops?

Historically the Revenue only stop a scheme if it is being abused. The MYRIAD cashless catering solution enables the scheme to be introduced on an individual employee basis, managing the sacrifice throughout the year, therefore abuse cannot take place.

How much do I need to invest to implement the MYRIAD Cashless Catering Solution?

The MYRIAD cashless catering solution can be configured to reflect the unique identity of your own company and service provision, regardless of size and number of locations. A detailed feasibility will be completed to identify the investment required which, to date, has indicated that the return on investment is within a 12-20 month period.

As an employee how do I receive value on my cashless card?

The MYRIAD cashless catering solution automatically manages the availability of funds in line with the employer’s approved scheme.

Can employees put additional money onto the cashless card?

Yes, additional funds can be added to the card using any of the MYRIAD cashless value loading solutions. This value is stored within a separate ‘purse’ on the cashless card.

What if an employee wishes to amend the monthly payment amount?

Once an agreement on the sacrifice has been made this forms part of the employee’s terms of employment and further professional advice should be taken.

Will all of my sacrificed salary be available to spend at once?

MYRIAD cashless catering will manage the fund in line with your own preferences and the limitations of the scheme; as an example this maybe to allow a daily, weekly or monthly limit to be created.

Can Salary Sacrifice be added to a pre-existing MYRIAD system?

Yes, MYRIAD cashless catering is a totally configurable, and scalable, solution. Following approval, MYRIAD cashless catering can usually be reconfigured within a day and does not require the return of any employee cards already in use.

What if I lose my cashless card?

The MYRIAD cashless catering solution provides a detailed, traceable, audit of all card transactions. If lost/stolen the system administrator can hotlist your last card, identify your last transaction and re-issue a new card without losing any funds.

How does an employee check their card balance?

The MYRIAD cashless catering solution provides current card balances by simply inserting the card into any reader; beyond this a detailed ‘trading report’ can be obtained from your system administrator or via the MYRIAD SmartPay web site.

How does the cashless catering system meet the reporting requirements of the Inland Revenue?

MYRIAD Reports is a powerful web enabled reporting tool can report on any aspect of operations. An approved reports portfolio can be agreed prior to implementation.

What if I leave the Company?

MYRIAD collates a real-time audit of all cashless transactions. Upon leaving your HR/Systems administrator can take you out of the scheme, present a report and make necessary adjustments.

 

For information on the Salary Sacrifice scheme: www.inlandrevenue.gov.uk