Do you know how the salary sacrifice changes impact on travel at your workplace?

Do you know how the salary sacrifice changes impact on travel at your workplace?

By Robin Pointon, Managing Director of Go Travel Solutions


In the Government’s Autumn Statement, the Chancellor announced plans to change how employers can support their employees with additional benefits through salary sacrifice. These changes came into effect from 1 April 2017 but how many UK businesses are aware of these changes and will anybody be caught out?


This is big news for the employee benefits sector and will certainly impact the choices available for benefit providers and employer HR managers. Businesses predicated on salary sacrifice may have to change their model.


HMRC is bringing more rigour to the salary sacrifice process and the changes announced will reduce the range of taxable benefits allowable. However, many key offerings were exempted, such as childcare, pensions, cycle to work and electric vehicle schemes.


For the car scheme, any orders that are placed before the end of March will save Tax and NI until 2021. For orders starting after April 2017, the current Tax and NI savings will continue but only for cars that emit less than 75 Co2g/Km i.e. all plug-in hybrids and pure electric vehicles. It should also be noted that for EVs, there is additional support in the form of Government grants to assist with purchasing.


In the April changes, paid car parking for staff is affected with its removal as a benefit that could be routed via salary sacrifice, although companies will continue to save on NI.


So with the retention of cycle to work, the commitment to purchasing EV cars and a change to the Tax position of staff car parking, we are encouraged that these changes are being aligned to pro-sustainability measures and are supporting employers that are positive around sustainable travel.


We would advise employers to make best use of the salary sacrifice schemes to support staff, wherever possible, as they struggle with daily workplace travel challenges such as parking pressures and rising travel costs. There is a range of value-driven employee benefits offers out there including our own Smartgo workplace travel package. 


If you want to know more about how the HMRC changes to salary sacrifice will impact your business, click on the HMRC link HERE.






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