A round-up of current government consultations with a bearing on employee benefits:
- Tax-efficient benefits
HM Revenue and Customs has launched a consultation to examine the potential impact on employers and employees should the government change the way the benefits code applies when a benefit in kind (BIK) is provided in conjunction with a salary sacrifice or flexible benefit scheme. The government has proposed introducing income tax and Class 1A employer national insurance contributions (NICs) on traditionally tax-advantageous salary sacrifice arrangements, although there would be some exceptions, such as pension contributions and bikes for work.
The consultation will run until 19 October 2016. The government expects to make an announcement based on consultation responses during the Autumn Statement 2016, and if there are any policy changes, these are likely to appear in the Finance Bill 2017. bit.ly/2clp1oN
- Pensions advice allowance
Following recommendations from the Financial Advice Market Review (FAMR), which was published in March 2016, the government is consulting on whether defined contribution (DC) pension members under the age of 55 should be able to access their retirement savings early to contribute towards the costs of financial advice. The Pensions Advice Allowance would enable individuals to withdraw up to £500 tax free. The consultation runs until 25 October 2016, with the proposals expected to come into effect from April 2017. bit.ly/2bBlstV
- Financial advice
The government is consulting on amending the UK definition of financial advice. This proposes changing the definition in line with that set out in the Markets in Financial Instruments Directive (Mifid). The amended definition would mean that individuals would only receive regulated advice when they are offered a personal recommendation for a specific product.
The consultation follows a recommendation from FAMR. It aims to reduce uncertainty about what constitutes advice, and provide a clearer boundary between advice and guidance. The consultation closes on 15 November 2016. bit.ly/2cOzVEL
- Company car tax for ultra-low emission vehicles
The government is consulting on the design of company car tax bands for ultra-low emission vehicles (ULEVs) for 2020-21 onwards. Company car tax rates and bands are already legislated through to 2019-20. The consultation is open for responses until 19 October 2016.