No incentive for voucher awards

The Government recently published rules on the treatment of non-cash awards, including store vouchers, which will now attract National Insurance Contributions (NICs) from April 99. It will also cost more to administer sales incentives and productivity schemes, and may even take longer to reward success.

Like many new regulations, the sum to be collected in NICs has been greatly over-estimated and the administrative costs greatly under-estimated. The new rules do seem to be a sledgehammer to crack a nut and are sure to damage staff and sales people’s morale as they see awards reduced to allow for NIC costs. They will see that yet again with this Government they get less for more.

Vouchers and merchandise were and will be sold for their motivation value, not their tax efficiency. Let’s have clarification on the NIC rules on the operational side so that we can get back to work and demonstrate the true value of vouchers and other non-cash awards to British industry.

Philip Shelley

Dixons Stores Group


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