The ATT provided a brief response to the HMRC Consultation proposing the removal of the tax advantages of receiving benefits-in-kind through salary sacrifice arrangements.
In our response, we endorsed the much fuller response made by CIOT. We also stated that Salary sacrifice schemes are an essential part of remuneration strategies for businesses. They allow employers to attract and retain the best employees. Each employee has different requirements and the ability for individual employees to negotiate their own package is now an essential part of recruitment.
In our view, the proposed changes will lead to scenarios where one employee might be on the same flexible benefits package as another employee but they are taxed differently simply due to whether the package was negotiated before or after joining the firm. This introduces considerable complications to this area and also increase the probability of the employer getting it wrong. It is most certainly not simplification.
Autumn Statement update on Salary Sacrifice Schemes
Despite the comments made by ATT, CIOT and others, the Chancellor announced in the Autumn Statement that the consultation proposals would be going ahead.
Read our Press Release released following this announcement here