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Salary sacrifice scheme advantages removed

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Salary sacrifice scheme advantages removed

Effective from April, the tax and employer national insurance advantages of many salary sacrifice schemes have been removed. Employees swapping salary for benefits are now required to pay the same tax as individuals who buy them out of their post-tax income.

Certain benefits are, however, exempt from the changes. These include: pension contributions and arrangements (including pensions advice); childcare vouchers; workplace nurseries; Cycle to Work schemes; and ultra-low emission cars with CO2 emissions of up to 75 g/km.

Arrangements made before April 2017 will be protected until April 2018. Arrangements put in place for cars, educational fees and accommodation will be protected until April 2021.