Salary Sacrifice Schemes

One expected change made in the statement was the reduction of benefits allowed in salary sacrifice schemes. Salary sacrifice schemes allow an employer to take the cost of a work place benefit (such as a phone, emission friendly car, childcare, healthcare, or pension contributions) to be taken out of the employee’s salary.

This means the employee effectively pays for the benefit, which they would have probably needed anyway, out of their gross pay rather than net.

Previously we have covered cases about salary sacrifice but they have been scrapped (apart from Government approved schemes such as childcare) in a bid to reduce what the Government see as tax avoidance. Any employer who currently uses salary sacrifice schemes should get in touch with their providers immediately.