New rules are coming in on 6 April 2017 for certain benefits in kind where they are provided by salary sacrifice.
If you provide benefits to your employees in exchange for salary sacrifice or have a flexible benefits package where your employee can choose a benefit or cash, or where you provide benefits but offer your employee a cash alternative then you need to know about these changes.
Benefits impacted are those which are currently taxable, like cars and white goods, and those currently tax exempt, like mobile phones and workplace parking.
You don’t need to do anything if your employees are only sacrificing salary for:
- Pensions or pensions advice,
- childcare vouchers,
- workplace nurseries,
- directly employer contracted childcare,
- cycle to work or
- ultra-low emission company cars (emissions of or under 75 g CO2 / km).
The new rules start on 6 April 2017. Salary sacrifice contracts entered on or before 5 April 2017 will be protected up until the contract hits a trigger point. From 6 April 2017, the normal trigger point is when the salary sacrifice contract renews, auto-renews, starts, ends or is modified or changed. At this point you must use the new rules. This should align with your normal contractual arrangements.
If an employee starts a contract on or after 6 April 2017, then you will need to immediately use the new rules for that employee. This will apply to any new recruits who adopt the arrangements.
For a better understanding of what is changing and what you need to do next, please click the button below to view our help sheet.