Salary Sacrifice – where or when will it end?

Thursday, December 3rd, 2015

gov.uk  In last week’s Spending Review and Autumn Statement there a is small but in my opinion not insignificant paragraph that expresses the concern the Government has with regards to the increase of salary sacrifice schemes. Indeed when I was setting up a salary sacrifice scheme several years ago an HMRC representative voiced an opinion as to how the schemes were going to be used, the concern, that employers would introduce as many schemes as possible in place of a pay award.

We were informed by the Government in the Summer Budget that salary sacrifice schemes would be put onto the agenda for review. With the introduction of the new tax free childcare scheme coming into being in early 2017, there seems to be a sort of inevitability that there will be a scaling back of available schemes if not a complete demise.

In the statement the Government have made it clear they “…will gather further evidence, including from employers, on salary sacrifice arrangements to inform its approach.”

The implication of this is there is likely to be some form of consultation.

For those who wish to read the full statement just click on the link below.

Spending Review and Autumn Statement 2015

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Salary sacrifice schemes I am sure will eventually be a thing of the past. After all these arrangements are to a certain extent an exclusive club as not all can join in particular those who earn or whose hourly rate is very close to national minimum wage.

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