Employee benefits salary sacrifice schemes axed by Chancellor

Restriction on tax-free employee benefits offered by salary sacrifice schemes have been announced in the Autumn Statement

From April 2017, staff will no longer be able sacrifice some of their pay for employee benefits in kind and employers and employees that use these schemes will pay the same taxes as everyone else.
The HMRC have seen the impact on their tax revenues and also seen the growing demand for flexible benefit packages, often combined with salary sacrifice arrangements.
However, child care, pensions, cycle to work schemes and ultra-low emissions company cars are excluded from the new restrictions.
Employers of smaller businesses are less likely to be affected by this compared to larger businesses, as you tend to be able to offer fewer employee benefits. However, you may start to receive worried questions from your employees about their childcare vouchers or cycle to work schemes. Employers should communicate with them and reassure them that their pensions, childcare vouchers and cycle-to-work schemes are exempt from these changes.
If employers provide any other benefits you may wish to firstly examine the impact on their business tax bill if you are to continue offering these.
You should then communicate this announcement from the Government and any expected changes to your benefits offering for your staff.
If any of these benefits happen to be contractual then this will need consulting on and negotiating with them, please seek advice from The HR Dept.
If you would like to speak to the HR Dept about the most cost effective way to provide benefits to your employees, then get in touch.


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Ian heads up the HR Dept Edinburgh & the Lothians team. The HR Dept specialises in helping SMEs with everything to with employment, through a local and personal service delivering practical and pragmatic advice and support. With nearly 30 years HR experience, Ian has a wealth of experience in helping businesses to ensure success through their people, be legally compliant and handle tricky people issues. As a business owner himself, Ian understands the challenges that come with running and growing a business. He is known for his ability to explain complex concepts simply and to make learning fun and enjoyable.