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Benefits that lose tax-free status from April 2018

Source: HM Revenue & Customs | 07/03/18

The tax and NIC advantages of certain benefits provided as part of a salary sacrifice arrangement changed from 6 April 2017. When the changes were introduced it was confirmed that all arrangements in place before April 2017 will be protected for up to a year. This means that current contracts that remained under the pre-2017 rules will now fall under the new rules from April 2018.

The new rules effectively remove the Income Tax and employer NIC advantages of certain benefits provided as part of salary sacrifice arrangements such as mobile phones and workplace parking. The April 2018 deadline is extended until April 2021 for cars with CO2 emissions above 75g/km, accommodation and school fees. Where an existing contract is varied, renewed or modified then the new rules apply.

The following benefits are not currently affected by the new rules:

  • Employer provided pensions and pensions advice
  • Childcare vouchers
  • Employer provided childcare or workplace nurseries
  • Bicycles and cyclist safety equipment including cycle to work schemes, and
  • Ultra-low emission cars, below 75g/km

Employers and employees are still free to use salary sacrifice, but with the tax and Class 1A NICs advantages removed. Employees can reimburse their employer for the cash value of any benefit, after the end of the relevant tax year.

Planning note

If you need any assistance in preparing for the changes from April 2018 then please do not hesitate to get in touch before time runs out.

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Some accountancy websites also provide pages and pages of tax information, helpsheets, etc. We prefer to give clients personally tailored advice. So, if you want details of tax rates and allowances just go to the HMRC website on which you should find what you’re looking for. If you need more individual advice please contact us.

Below are links to websites you may find of interest, but as we like to support our local community and clients, we have included links to websites that may be of interest:

HMRC

FT

BBC

VEALE WASBROUGH VIZARDS

CESP

PRACTICE INDEX

SIMCOMM ACADEMY

More Local:

FOOTPLATE EXPERIENCE

ANGLEBURY PRESS

OFFCAMBER.CO.UK

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Sandisons is the trading name of Sandisons Limited. Registered office: Badger House, Salisbury Road, Blandford Forum, Dorset DT11 7QD.  Co. Reg. No. 05068291

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