24 Jan Salary Exchange
Also known as salary sacrifice, in the Autumn Budget Statement the Chancellor of the Exchequer, Philip Hammond, announced significant changes to some employee benefits funded via salary exchange.
The good news is that the Chancellor confirmed that for pensions, childcare vouchers and cycle to work schemes salary sacrifice would continue. It is likely that the above grouping of benefits represents the majority of Salary Sacrifice usage in the UK, and therefore these exemptions to change are welcome.
According to a survey by leading benefits provider, Jelf, almost 1 in 4 employers would need to alter their employee benefits package as a direct result of the Chancellor’s decision.
The first changes come in to force from April 2017. This means that many employers have little time to review the impact of these changes and take action.
Employers now need to decide whether to remove a given benefit or replace them with other benefits not affected by the changes. These decisions will need to be carefully considered, not least because any alteration to the Employee Benefits offering can be influential to employee engagement levels.