EXCLUSIVE: Less than one-fifth (17%) of employer respondents either have, or will, review their benefits strategy in light of the changes to salary sacrifice, according to research by Employee Benefits and Staffcare.
The Employee Benefits/Staffcare Benefits research 2017, which surveyed 271 employer respondents in February-March 2017, also found that 20% of respondents have, or will, change the mechanism by which they offer benefits affected by the changes.
In the Autumn Statement 2016, Chancellor Philip Hammond confirmed the government’s intention to limit the range of benefits that provide tax and national insurance contribution (NIC) advantages when offered through a salary sacrifice arrangement.
Benefits in kind (BIKs) with a cash allowance option and flexible benefits schemes with a cash option are subject to the changes, which came into effect on 6 April 2017. Some benefits are exempt, including pensions, ultra-low emission vehicles (ULEVs), childcare, and bikes-for-work schemes.
Arrangements entered into before 6 April for company car schemes, accommodation, and school fees will be protected until April 2021, and all other benefits will be protected until April 2018 unless the arrangement is subject to variation.
Almost a third (32%) of respondents say that the new legislation does not impact benefits strategy because the benefits their organisations offer through a salary sacrifice arrangement are exempt from the changes.
Just 7% of respondents will stop offering benefits that no longer attract tax and national insurance advantages, while 5% have taken, or intend to take, additional measures to offset any potential effect on employee engagement resulting from the changes to salary sacrifice.
Interestingly, no respondents saw an increase in take up of affected benefits ahead of the April 2017 cut-off date.