Salary Sacrifice

Salary Sacrifice

  • Date: Monday 27th March 2017
  • PDF: Download

From 06 April 2017 Employers will have to review their salary sacrifice arrangements, since tax advantages for some of them will be removed.

Agreements NOT affected by the changes:

  •           Pension saving into a registered pension scheme
  •           Employer provided pensions advice
  •          Employer-supported childcare
  •           Cycle to work schemes
  •          Ultra Low Emission Cars (ULEVs)

-          Those already in contracts for benefits in kind involving salary sacrifice will be protected for the length of that contract, subject to final backstop dates.

Agreements no longer available under a salary sacrifice agreement:

  •           Income Protection – current contracts are protected but future increases will be subject to tax and NI.
  •            Life Assurance – New schemes will now be treated as a taxable benefit for future contribution increases and pay-outs.
  •            Any taxable benefits in kind such as cars, phones, white goods or parking permits.

There will also be a revaluation of benefits in kind, company cars in particular and a new P11d format will be released in April 2018.

Source: SSG - Manuela Grossmann

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