Consultancy Services

BlueSky Consultancy Services Information

Scheme Support

BlueSky can also help with a particular project or issue, from re-writing communications to revising investment options and the closure of schemes, and aim to get to know and work with employers who run their own schemes to the trustee body of a client, supporting and developing its work.

This includes advanced administration processes, highly developed investment expertise and knowledge of defined benefit or defined contribution schemes, as we recognise the accuracy of data required and financial significance of schemes to their members and sponsoring employers.

Above all BlueSky provide an extremely professional service of very high quality and supply credible, capable and commercial support for pension schemes and their trustee board and has a growing number of clients saving valuable time and income by using an outsourced service.

Salary Sacrifice

BlueSky can help you through the process and start to make cost savings in light of your added responsibilities throughout the ‘Auto Enrolment’ years. BlueSky can provide simple communications to inform employees of the changes to their contracts of employment (a requirement of introducing Salary Sacrifice) and assess the benefits to every employee.

Salary Sacrifice involves employees giving up part of their salary in exchange for a non-cash benefit, in this case, the payment of contributions to a pension scheme.

In a typical case where the employees are active members of an occupational pension scheme, an amount equal to the pension contributions made by the employee would be deducted from their basic pay, reducing the tax and NI deductions.

In exchange the employer would pay this amount to the pension arrangement in addition to the standard employer contributions.

Benefit of Salary Sacrifice for employees
The amount of pension contributions made by the employee would be deducted from their basic pay to create a reference salary from which tax and NI contributions will be deducted increasing net pay.
Benefit of Salary Sacrifice for employers
The benefit is in the saving the employer achieves in National Insurance Contributions.
Will this affect other benefits?
It could do. If Salary Sacrifice pushes an employee’s salary below the Lower Earnings Limit for the purpose of paying NICs then certain state benefits could be affected. These include the basic state pension, statutory sick pay, statutory maternity pay and tax credits.
Do you need the employees’ agreement?
Yes. However, employees are unlikely to complain if they gain overall from Salary Sacrifice.
What does HMRC have to say?
Quite a lot, and it’s all fairly helpful and positive although HMRC is the main loser from Salary Sacrifice because of the reduction in NICs. HMRC permits Salary Sacrifice. HMRC guidance includes an eight-page guide and a shorter Q&A on how to make Salary Sacrifice effective. HMRC insists that the agreement to sacrifice an amount of salary is made before it is treated as received for tax and NIC purposes. Its guidance also explains in some detail what impact Salary Sacrifice might have on other benefits. Salary Sacrifice arrangements do not have to be approved by or notified to HMRC but it is open to employers to consult HMRC on the correct tax treatment of the arrangements. However, it must be remembered that although HMRC gives this guidance is no guarantee that it might not revoke Salary Sacrifice at a later date.