After what amounted to three Budget statements last year, 2016 looks set to return to the more usual format of two, with the first issued on 16 March.
So what should we expect for the world of employee benefits?
As we have previously reported, the proposed changes to pension tax relief have apparently been shelved until after the EU referendum and any associated political issues have been resolved. Yet that does not mean that no change will be forthcoming in this space. In lieu of the major changes (and associated tax savings to the Treasury) outlined in the “Strengthening the incentive to save” consultation George Osborne may look to a less radical restriction of allowances for pensions.
Another option may be to clamp down more heavily on Salary Sacrifice arrangements which are used to fund a wide range of employee benefits – with items as diverse as pensions, cycle to work, childcare vouchers and employee travel schemes all beneficiaries of such a mechanism.
Other items could include a possible further increase to Insurance Premium Tax (IPT) (see this post from July 2015 for details of the previous increase). This would have implications for most UK insurances, and for healthcare insurances in particular within the employee benefits sector.
So three possible areas of change, all of which have the potential to present challenges to both employers and the benefits industry.
Other employee benefit topics might also get a mention in the Chancellor’s speech (or supporting document):
- The much delayed Tax Free Childcare initiative is now only around 12 months away from the revised launch date, so some further detail on these proposals may be forthcoming.
- Fit for Work began in 2015, and as such may merit some further mention or change to the funding in place for this important new service.
- An Employee Volunteering right was a Conservative manifesto promise which has had little coverage since the election. This key topic could well resurface at some point this year, and quite possibly in a Budget speech.
One other item may also present itself. The Chancellor has long been a fan of merging the Income Tax and National Insurance systems, with this being a key aim of a Budget speech as long ago as 2010. This is still a major ask for the UK to achieve – particularly with the current EU uncertainty – yet this item could feature again as a Treasury objective. For more on our thoughts on this issue please see this post from last year.
As ever we will watch the speech with interest, and will report the headline messages as soon as we are able to do so.
For the full original article and other similar posts, please visit the Jelf Group blog.