6th April 2017
It's the beginning of the new tax year, and there are significant changes to those benefits paid for through Salary Sacrifice schemes.
These schemes have proved exceptionally popular with employers and employees alike, allowing people to sacrifice cash from their pay before tax in order to buy a range of benefits. Employers have benefitted from National Insurance payment advantages since these schemes were created, but the government decided in the Autumn Budget Statement that they wanted to equalise the tax paid for those using Salary Sacrifice schemes and those who have to buy the same benefits from their post-tax income.
The new rules apply to employees who join any Salary Sacrifice scheme on or after 6 April 2017 and those in existing schemes will be caught when they renew their agreement.
Some Salary Sacrifice benefits remain exempt from these changes – pensions, pension advice, childcare, ultra-low emission cars and Cycle to Work scheme benefits. In addition, some benefits such as cars, school fees and accommodation may be protected until April 2021.
This legislation will affect every employer differently, depending on the benefits offered via Salary Sacrifice, and how they determine which of their employees may qualify to join the schemes that they run.
So, there are several things that employers should be doing:
To find out more about these changes and how they might affect your business, call us on 01252 711244.