What REBA says about the salary sacrifice announcement in the Autumn Statement

The Reward & Employee Benefits Association is delighted that government has listened to employers and will protect salary sacrifice schemes already in place until April 2018, while arrangements for cars, accommodation and school fees will be protected until April 2021.

We are also very pleased to note that advice on workplace pensions and low emission cars have now also been protected, along with pensions savings, employer-supported childcare and cycle-to-work schemes.

However, REBA did ask that the government to protect all salary sacrifice benefits which support government policies or encourage wellbeing in the workplace. This has not happened.

While the REBA agrees that the government did need to clamp down on the increasing misuse of salary sacrifice for more ‘luxury’ perks, we are disappointed that so many essential employee benefits have been caught up in this change.

Removing NI and/or income tax breaks on so many employee benefits currently offered via salary sacrifice schemes will mean that many low and middle earners will lose access to these perks.

It will be the ‘just about managing’ employees which will be most affected by no longer having access to so many health and wellbeing benefits and mobile phones.

REBA reaction in the press:

BBC: Employee perks to lose tax relief

People Management: Benefits providers in turmoil as chancellor clamps down on salary sacrifice schemes

Human Resources: Employees will need to pay more for workplace perks

Professional Pensions: Chancellor restricts 'most' salary sacrifice benefits in £1bn Autumn Statement raid

Pre-Statement:

The Sunday Telegraph: Revealed: Treasury to announce tax raid on work perks enjoyed by millions of middle earners

The government’s Autumn Statement announcement on Salary sacrifice:

Following consultation, the tax and employer National Insurance advantages of salary sacrifice schemes will be removed from April 2017, except for arrangements relating to pensions (including advice), childcare, Cycle to Work and ultra-low emission cars. This will mean that employees swapping salary for benefits will pay the same tax as the vast majority of individuals who buy them out of their post-tax income. Arrangements in place before April 2017 will be protected until April 2018, and arrangements for cars, accommodation and school fees will be protected until April 2021.