Salary sacrifice changes from April 2018

Source: HM Revenue & Customs | | 19/12/2017

The tax and NIC advantages of certain benefits provided as part of a salary sacrifice arrangement were removed from 6 April 2017. The new rules effectively remove the Income Tax and employer NIC advantages of certain benefits provided as part of salary sacrifice arrangements such as mobile phones and workplace parking.

When the changes were introduced it was confirmed that all arrangements in place before April 2017 will be protected for up to a year. This means that current contracts that remain under the pre-2017 rules will fall under the new rules from April 2018. The April 2018 deadline is extended until April 2021 for cars with CO2 emissions above 75g/km, accommodation and school fees. Where an existing contract is varied, renewed or modified then the new rules immediately begin to apply.

The following benefits are not currently affected by the new rules:

  • Employer provided pensions and pensions advice
  • Childcare vouchers
  • Employer provided childcare or workplace nurseries
  • Bicycles and cyclist safety equipment including cycle to work schemes, and
  • Ultra-low emission cars, below 75g/km

Planning notes

Employers and employees are still free to use salary sacrifice, but with the tax and Class 1A NICs advantages removed. Also, employees can reimburse their employer for the cash value of any benefit, after the end of the relevant tax year.



Toggle

Latest News

Tax gap lowered according to HMRC
20/06/2018 - More...
HMRC has published figures that show the tax gap for the 2016-17 tax year was 5.7%. The tax gap is basically the

M&S lose expensive VAT case
20/06/2018 - More...
The First-Tier Tribunal recently heard an appeal that considered the correct VAT treatment of a promotional offer by the

Self-assessment second instalment due end of July
20/06/2018 - More...
Taxpayers that make payments on account should be aware that the second payment on account for 2017-18 is due on or

Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login

 

Search News


Our Address

Sterlings Ltd
Chartered Accountants
Lawford House,
Albert Place,
London N3 1QA

 

Company Registration No: 1357789
Registered in England and Wales
VAT No: 802 8138 49

Contact Us

tel: 020 8343 2255
e fax: 0871 474 2696
This email address is being protected from spambots. You need JavaScript enabled to view it.

Why Choose Us

Our Number

In the world of accountancy these are the only numbers you need -
020 8343 2255