Rewards & BenefitsEmployee BenefitsBudget 2016: Salary sacrifice to be cut – but not for pensions

Budget 2016: Salary sacrifice to be cut - but not for pensions

The government plans to limit the use of salary sacrifice but will allow it for pension saving, childcare and health-related benefits.

The government plans to limit the use of salary sacrifice but will continue to allow it for pension saving, childcare and health-related benefits such as cycle to work.

According to the Budget 2016 documents, clearance requests for salary sacrifice arrangements from employers to HMRC have increased by over 30% since 2010.

However it acknowledged that it wanted to encourage employers to offer certain benefits but is concerned about the growth of salary sacrifice schemes.

“The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes,” it said.

“However, the government’s intention is that pension saving, childcare and health-related benefits such as cycle to work should continue to benefit from income tax and NICs relief when provided through salary sacrifice arrangements.”

No details were released about what benefits would be targeted and how much this would save HM Treasury.

Comments are closed.

Related Articles

Employers must act now to prevent salary sacrifice raid

Employee Benefits Employers must act now to prevent salary sacrifice raid

3y Owain Thomas
Budget 2016: The key changes for HR leaders

Employee Benefits Budget 2016: The key changes for HR leaders

3y Owain Thomas
Budget 2016: Tax relief extended for employer-funded pension advice

Employee Benefits Budget 2016: Tax relief extended for employer-funded pension advice

3y Owain Thomas
Budget 2016: Shares for rights gains capped at £100k

Employee Benefits Budget 2016: Shares for rights gains capped at £100k

3y Owain Thomas
Budget 2016: Osborne hits public sector employers with £2bn pension tax rise

Employee Benefits Budget 2016: Osborne hits public sector employers with £2bn pension tax rise

3y Owain Thomas