06 March 2024

Jeremy Hunt announced that the government intends to radically reform the HICBC from April 2026. However, this will require significant legislative effort to achieve. The system will eventually move to a household income test for eligibility and will require HM Revenue and Customs (HMRC) to collect additional information to achieve this.

In the interim, from April 2024, the Treasury intends to increase the threshold from £50,000 to £60,000 with the top end of the taper also increasing from £60,000 to £80,000.

While this process exists mainly outside of the payroll process, it may be that you want to consider the impacts on employees opting to salary sacrifice a portion of their earnings. It’s common for individuals to use salary sacrifice arrangements to minimise the impacts of the charge and, for example, pay into a tax beneficial pension scheme.

Would your business consider this policy change to be a ‘significant lifestyle change’ and allow employees to make changes to their arrangements outside of your normal cycle?

Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.