Autumn Statement will be on Wednesday 23 November 2016.
Regulations are likely to be altered so that particular employee benefits, such as mobile phone contracts, health checks and gym memberships, will lose their tax relief status.
It is anticipated that the changes will be effective from April 2017, but the Reward & Employee Benefits Association (REBA) has said this is too soon and has appealed to the government to delay the move until April 2018.
This news follows the closure of the salary sacrifice for the provision of benefits-in-kind consultation paper on 19 October 2016. The paper outlined that, in principle, the government does not believe benefits-in-kind should be provided by employers at a cost to the Exchequer through salary sacrifice arrangements.
The Treasury believes the schemes – which allow employees to forgo some of their wage in return for perks – cost too much in terms of income tax and employer national insurance contributions (NICs).
The changes to tax legislation mean that when a benefit-in-kind is provided through salary sacrifice, it will be chargeable to income tax and Class 1A employer national NICs. This will mean that, even if a benefit is normally exempt from tax and Class 1A NICs, it will now be payable via the amount of salary sacrificed or the cash equivalent set out in statute (if any), whichever is greater. Effectively, any benefits that are classed in such a way will be treated no differently to the rest of the employee’s salary.