With impending changes to salary sacrifice legislation potentially coming into effect next month, it’s crucial that employers and employees understand the changes, which is where we come in.
In a consultation paper published in August, HM Revenue & Customs (HMRC) said that it does not believe that benefits-in-kind should be provided by employers at a cost to the Exchequer via salary sacrifice. The plans unveiled by HMRC will see changes to legislation so that benefits provided through salary sacrifice are chargeable to income tax and National Insurance.
Those benefits likely to be impacted include health screenings, car parking, mobile phones and computers, additional life and income protection insurance. Now is a good time to review the tax effectiveness of current of proposed arrangements.
One silver lining is that HMRC has confirmed that pension contributions paid under a salary sacrifice arrangement will be excluded from the proposals and continue to be treated as employer contributions.
To discuss any points raised here or you want more information on how salary sacrifice can impact you, call us on 01244 539 595.