Salary Sacrifice perks– changes ahead

The Government is to stop 'salary sacrifice' tax perks on a range of employee benefits from 5 April 2017.


To date, employers have been able to offer their staff the option to swap a part of their salary in return for a non-cash benefit. As a result of having a lower salary, employees pay less income tax and make lower National Insurance contributions. 


However, in last year’s Autumn Statement the Chancellor announced that the list of qualifying perks for these schemes would be reduced. Those no longer qualifying include: 

  • Company cars (unless they are  ultra-low emission vehicles)
  • Work-related training
  • Car parking near your workplace
  • Health screening checks
  • Mobile phones and computers
  • Accommodation
  • Gym membership
  • School fees


Arrangements put in place before April 2017 will be protected for up to one year. Cars, accommodation and school fees arrangements will be protected until April 2021.


The following schemes are exempt from the changes and so will continue to offer tax perks:

  • Pension contributions
  • Childcare
  • Cycle-to-work schemes
  • Ultra-low emission cars

If you would like to discuss any implications of these changes, please contact your local Lentells office.