Although not specifically mentioned in the Chancellors Budget speech, the supporting document does include this text:
“Salary sacrifice arrangements enable employees to give up salary in return for benefits-in-kind that are often subject to more favourable tax treatment than salary. The government wants to encourage employers to offer certain benefits but is concerned about the growth of salary sacrifice schemes: clearance requests for salary sacrifice arrangements from employers to HMRC have increased by over 30% since 2010. The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes.”
Which sounds threatening enough. Yet the tone improves as the paragraph concludes…
“However, the government’s intention is that pension saving, childcare and health-related benefits such as Cycle to Work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.”
So it appears that only the more unusual benefits that have found their way into Salary Sacrifice offerings will be targeted at this stage, which is good news for all those employers who rely on this mechanism to fund traditional employee benefit offerings.
Best regards,
Steve
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