HMRC is consulting until 19 October 2016 on restricting the use of salary sacrifice for the provision of benefits in kind with effect from April 2017. As previously announced, employer pension contributions, employer-provided pension advice, employer-supported childcare, provision of workplace nurseries, and cycles and cyclists' safety equipment provided under the cycle to work scheme will be unaffected by the proposed changes. Salary exchanged for intangible benefits, such as flexible working or additional holiday entitlement, and payroll giving will also be unaffected. Other benefits in kind provided through salary sacrifice will become chargeable to income tax and employer NICs on the greater of the amount of salary sacrificed and the cash equivalent specified by statute (if any).
Key contacts
Steve Bell
Managing Partner - Employment, Industrial Relations and Safety (Australia, Asia), Melbourne
Emma Rohsler
Regional Head of Practice (EMEA) - Employment Pensions and Incentives, Paris
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