George Osborne has fired a warning shot towards salary sacrifice, with the Government expressing concern about the growth of the schemes available with income tax and National Insurance contribution relief.
The Government is considering plans to limit their availability, and only pension saving, childcare and those with health benefits such as cycle to work schemes were specifically mentioned as schemes the Government is keen to see continue, with car salary sacrifice, a growing area of the fleet market, a notable omission.
“The government wants to encourage employers to offer certain benefits but is concerned about the growth of salary sacrifice schemes: clearance requests for salary sacrifice arrangements from employers to HMRC have increased by over 30% since 2010,” said the Budget statement documentation. “The government is therefore considering limiting the range of benefits that attract income tax and NICs advantages when they are provided as part of salary sacrifice schemes.”
There is no timescale stated, and no detail yet on exactly which salary sacrifice schemes would or wouldn’t be under threat.
