How the changes to salary sacrifice affect you

03 January 2017

How the 2017 Salary Sacrifice Changes affect you

Don’t get down about 2017’s changes to salary sacrifice schemes.

Many key offerings were exempted, like cycle to work schemes, meaning they remain a great tool to entice and retain employees.

Cycletowork

And even the salary sacrifice schemes that were impacted with relief on income tax and NI contributions for employers scrapped, there will still be employee savings to be made on NI payments.

If you’re worried about forthcoming changes to salary sacrifice or want to know what benefits you can still offer, contact us today

The Changes to Salary Sacrifice

In the Government’s Autumn Statement, the Chancellor announced plans to change how employers can support their employees with additional benefits through salary sacrifice.

These changes will come into effect from 1st April 2017.

This was reported in the press with a slight air of doom and gloom but in reality there remain a large range of benefits that can be offered to employees that will still bring benefits to them and employers.

Salary Sacrifice and Employees from 2017

  • Employees can save tax and NI on key products and services that they value (such as childcare vouchers, workplace nursery and cycle to work)
  • Employees can get access to big ticket items, paid up front by the employer (mobiles and computers)
  • Employees can get corporate discounted rates on products and still save employee NI (gym memberships and car parking)


The table below shows how the savings will look from 1st April 2017.

As can be seen these benefits still make a major difference to the finances of employees, enabling employers to attract, motivate and retain the best calibre employees when deploying some of the salary sacrifice schemes available through Enjoy.

The other important thing to point out is with regards the childcare voucher benefit.

Parents can sign up to take the childcare voucher benefit until 31st March 2018 and all parents taking the benefit can continue to do so until their child's 15th birthday.

This is useful to know as often parents think that vouchers are just suitable for children up to the age of 5
but they can be used to pay for the care of older children at breakfast clubs, after school clubs and holiday clubs.

Employees who become parents for the first time, after 31st March 2018, won’t be able to access childcare vouchers at all.

As long as both parents are working they will have to access the governments new form of help called Tax Free Childcare.

However if only one parent is working then they won’t be able to access any help with their childcare costs at all!

Name of benefit

Current saving

Savings from April 2017

Childcare Vouchers

Tax and NI

No change

Workplace nursery

Tax and NI

No change

Cycle to work

Tax and NI

No change

Gym benefit

NI

No change

Mobile phone benefit

NI

No change

Enjoy Technology

NI

No change

Will writing benefit

NI

No change

Car parking

Tax and NI

Removal of Tax - but will continue to save on NI

Dining card

Tax and NI

Removal of Tax - but will continue to save on NI

Kids pass

Tax and NI

Removal of Tax - but will continue to save on NI

Car scheme

Tax and NI

Any orders placed before the end of March will save Tax and NI until 2021. For orders starting after April 2017 the current Tax and NI savings will continue but only for cars which emit less than 75 Co2g/Km, that's all your plug-in hybrids and pure electric vehicles



If you have any other questions, please do call or contact us.

 

 

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