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Chaos around the corner

12 October 2016 / James Hunt
Issue: 4571 / Categories: Comment & Analysis

The likely effect the proposed changes to salary sacrifice will have on employers and employees.


  • The government is concerned about the increased use of salary sacrifice arrangements.
  • The new legislation will require employers to determine the cash equivalent of the benefit and the value of the salary sacrifice.
  • HMRC is not allowing enough time for employers to change salary sacrifice arrangements.
  • Not all arrangements are affected.

Salary sacrifice has been available in the UK since the late 1990s after the demise of profit-related pay. Arrangements have evolved from flexible benefits schemes reserved for the largest employers which could afford the advice staff and IT infrastructure to administer salary sacrifice back then to the imaginative and readily available arrangements we have today thanks to tax advisers and the availability of web-based portals.

A staple of many employers’ remuneration planning salary sacrifice provides the opportunity...

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