Mid-year 'cost of living' payment - General - Our Profession

85 Mid-year 'cost of living' payment

10 May, 2022 14:34

Hi everyone,

I was wondering what others thoughts were on paying a one off payment mid-year to help with the rise in the cost of living.

Also if and what other companies were doing to help with the rise of cost of living.

Thanks

43821 views

Charles | 0 Posts

CIPD Staff

16 Sep, 2022 10:38

In reply to Gerry Crow:

just to flag that the CIPD has recently relaunched its cost-of-living hub, which includes a new blog.
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Steve Bridger | 0 Posts

Community Manager

16 Sep, 2022 12:37

In reply to Charles:
Thanks, Charles.
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Claire | 0 Posts

3 Oct, 2022 09:23

I have been asked to look into giving staff gift vouchers for supermarkets etc rather than a one-off cash payment through payroll. One of our directors has said that we can give up to £300 in vouchers tax-free, the articles I have found on Google indicate the figure is £50 tax-free. Has anyone else explored this as an option please? I'd welcome your comments if so.
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Stephen Jarrett | 0 Posts

3 Oct, 2022 09:38

we use edenred a tax free benefits portal it coats us £1000 per annum for all staff to get 3-4% off all supermarkets 5-10% of all retail and holidays and restaurants and the eaverage emnployee saves £1500 per annum !!! so we like it
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Claire | 0 Posts

3 Oct, 2022 10:06

In reply to Stephen Jarrett:
Thanks Stephen, I'll take a look
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Charles | 0 Posts

CIPD Staff

4 Oct, 2022 11:32

In reply to Claire :

Does this help?
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Maya | 0 Posts

4 Oct, 2022 11:40

In reply to Claire :
I've also been looking in to supermarket vouchers recently.

They are only 'trivial benefits' (non-taxable) if they are £50 or less. As far as I am aware, the £300/year limit only applies to directors or other office-holders of ‘close companies’ (a ‘close company’ is ‘under the control of 5 or fewer participators/associates or under the control of directors and their associates’).

The voucher can’t be exchangeable for cash, can’t be as a reward for performance at work, and can’t form part of the employee’s contract.

I also don't think you can give vouchers regularly (every month, for example), or it starts to look like they are being given in lieu of salary.
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Claire | 0 Posts

4 Oct, 2022 12:08

In reply to Charles:
Hi thank you. I've now found this one too which indicates that we can give a series of £50 vouchers tax-free hence a £300 payment split across 6 months' worth of £50 vouchers - www.gov.uk/expenses-and-benefits-trivial-benefits
which our Finance Director seems to think is ok
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Lynsey Melville | 0 Posts

7 Oct, 2022 11:43

We have just implemented a Health Cash Benefit to all staff. It gives them cashback on a number of healthcare costs, optician, dental etc, also an EAP, discounts including various everyday items, cinema, shopping (high street and online), entertainment, travel and more. It costs the employee from £1 (approx) per month depending on the level you choose. This has been received really well by all employees.
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Gary Lyness | 0 Posts

10 Nov, 2022 15:05

In reply to Helen:
Is this just paid as a bonus, so Taxable?
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Claire | 0 Posts

10 Nov, 2022 15:35

In reply to Gary Lyness:
Health cash plans are normally classed as a Benefit in Kind for tax purposes
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Gary Lyness | 0 Posts

10 Nov, 2022 15:43

In reply to Claire :
Hi, sorry, my question was in response to another comment which was the one off cash payments. e.g. £300 cost of living payment. Are those just "bonuses", so fully taxable.
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Claire | 0 Posts

10 Nov, 2022 15:49

In reply to Gary Lyness:
Yes cash bonuses are subject to tax and NIC.
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Louise Andrews | 0 Posts

11 Nov, 2022 08:04

In reply to Gary Lyness:
Hi Gary

We've just received ours and yes subject to tax and NI contributions as per normal but every little helps as they say.
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Charles | 0 Posts

CIPD Staff

11 Nov, 2022 12:07

In reply to Claire :
In case of interest, we have a new CIPD blog looking at how interventions to help low-waged workers during the cost-of-living crisis (such as a bonus) can cause unintended consequences for those on universal credit community.cipd.co.uk/.../why-employer-cost-of-living-help-can-fail-universal-credit-claimants I hope you find it both interesting and informative
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