The Government has confirmed that it is to limit the benefits that attract tax and national insurance (NI) advantages when provided as part of a salary sacrifice arrangement.
The benefits which will no longer attract the relief include company cars (unless ultra-low emission vehicles), work-related training, car parking near work, health screening checks, mobile phones, computers, accommodation, school fees and gym memberships.
The benefits that can continue to benefit from tax and NI relief if provided through salary sacrifice will be limited to enhanced employer pension contributions to registered pension schemes (and pensions advice); childcare benefits (employer-supported childcare and provision of workplace nurseries); cycles and cyclists' safety equipment provided under the cycle to work scheme; and ultra-low emission cars.
The changes will take effect from take effect from April 2017, although arrangements in place before that date will be protected until April 2018. Cars, accommodation and school fees will continue to be tax free until April 2021.