Globalization Partners

UK Changes Employee Benefits Tax Rules

by Globalization Partners
December 2016
Reading Time: < 1 minute

The UK’s popular “salary sacrifice” tax benefit will undergo significant changes in 2017. Until now, employees have been allowed to swap part of their salary for non-cash employee benefits, like pension contributions, medical insurance, mobile phones, appliance purchases, and gym memberships, but the program is expensive and the government has decided to cut it back. Some perks will still be allowed however, including:

  • ultra-low emission cars
  • pension savings and advice
  • childcare
  • cycle-to-work

Other perks are allowed only until April of 2018, including:

  • company cars
  • accommodations
  • school fees

The new limitations are predicted to cost employees and their employers £85m in 2017 and 2018 and to raise £1bn in additional tax revenues over the next six years.

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