Consultation on salary sacrifice for the provision of benefits in kind
12 August 2016
The government is seeking views about limiting the range of benefits-in-kind that attract income tax and National Insurance contributions (NICs) advantages when they are provided as part of salary sacrifice arrangements.
As announced in Budget 2016 the government is concerned about the growth of salary sacrifice schemes and 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.
The purpose of this consultation is to explore potential impacts on employers and employees should the government decide to change the way the benefits code applies when a benefit-in-kind is provided in conjunction with a salary sacrifice or flexible benefit scheme.
Employee contributions to employer-provided pensions, employer-provided pension advice, employer-supported childcare and provision of workplace nurseries and cycles and cyclist’s safety equipment provided under the cycle to work scheme will remain unaffected by this measure.
The consultation on salary sacrifice for the provision of benefits in kind will run until 19 October 2016.
Watch out for a survey from the CIPP Policy team as we will be asking for your feedback to inform our formal response.
The government will publish details of the consultation responses and expects to make an announcement at Autumn Statement 2016 on decisions made in light of those responses. Any policy changes are expected to feature as part of Finance Bill 2017.