Some employee perks are losing their tax breaks.
From 6 April 2017 the tax and employer national insurance advantages of a salary sacrifice or salary exchange will be removed, with the exception of:
- Childcare (Vouchers, workplace nurseries or directly contracted childcare)
- Cycle to work
- Ultra-low emission cars with co2 emissions of or less than 75g/km.
Any employees who have swapped their salary for benefits, for example, additional holiday days, will now pay the same tax as if they were buying them out of their post-tax income.
If any arrangements which were in place before April 2017 relate to cars with co2 emissions over 75g/km, accommodation or school fees, they will be protected until April 2021. All other arrangements (arranged before April 2017) that are not detailed above will be protected until April 2018.
If you are worried about any of these forthcoming changes, please contact us at Green & Co for further help and guidance.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.