In the Autumn Statement last year, the government said it "remains concerned about the growth of salary sacrifice arrangements and their fairness on the tax system".
On 10 August, HMRC announced a consultation which sets out a proposal for the future tax treatment of these benefits.
What is the government proposing?
The government is considering limiting the range of benefits-in-kind (BiKs) employers can offer. Specifically, they're looking at all benefits that attract income tax and National Insurance contribution (NIC) advantages, when provided as part of salary sacrifice and flexible benefit arrangements.
What’s not affected?
• Employer-supported childcare (childcare vouchers)
• Provision of workplace nurseries
• Employer pension contributions
• Employer-provided pension advice
• Salary sacrificed for extra annual leave or flexible working hours
Cycles (and cyclists' safety equipment) provided under the cycle to work scheme will also remain unaffected as the government wants to encourage employers to provide these to their employees.
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What happens next?
The government expects to make an announcement in their 2016 Autumn Statement. Any policy changes are expected to feature as part of the 2017 Finance Bill.