Summer Budget 2015: No immediate changes to salary sacrifice schemes were announced by Chancellor George Osborne during his Budget speech yesterday (8 July).
However, in the Budget documents it is noted that the government will actively monitor salary sacrifice schemes and their impact on tax receipts.
The documents state: ‘Salary sacrifice arrangements can allow some employees and employers to reduce the income tax and national insurance that they pay on remuneration. They are becoming increasingly popular and the cost to the taxpayer is rising.’
Malcolm McLean, senior consultant at Barnett Waddingham, said: “Given the importance of salary sacrifice as a means of incentivising, it is good at the moment at least, that the government has resisted the urge to axe this form of relief which is widely viewed as a positive ‘win win’ for both employer and employee.”
With thousands of SME’s due to auto enrol their employees over the next two years and many of them considering doing so via a salary sacrifice scheme, it is worrying that this incentive may be under threat.