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Legal Updates

A farewell to Salary Sacrifice Schemes?

26 August 2016 #Employment

Following its announcement in this year’s Budget that some benefits-in-kind (provided via salary sacrifice schemes) will start to attract tax and NI contributions, the Government has launched a Consultation to gain a wider understanding of the impact this could have.

If effected, some benefits-in-kind offered through salary sacrifice such as company cars, health insurance and other related benefits (including gym memberships) will no longer attract income tax and national insurance advantages. Cycle to work schemes, the provision of workplace nurseries, employer supported childcare and employer pension contributions will not be affected by the proposed changes.

The Consultation entitled “Salary Sacrifice for the Provision of Benefits in Kind” was launched earlier this month. Alongside employers and employees, trade organisations and any interested parties are invited to provide their views. Questions being asked include how long employers would need to implement any changes e.g. to payroll and software. The Consultation closes on 19th October 2016 with a view that policy changes will feature as part of the Finance Bill 2017.

Employers will still be able to offer employees benefits via a salary sacrifice scheme, however, choosing to do so will likely bring a financial burden which may outweigh the benefits of running such schemes. 

For further information on how our employment lawyers can support you with your salary sacrifice teams, please contact us on

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
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