The Government in its Autumn Statement 2016 announced changes to certain salary sacrifice schemes which will come into force from April 2017.
Salary sacrifice (also known as salary exchange) is where an employee amends their employment contract to accept a lower salary in return for a specific benefit. The employee only pays Income Tax and National Insurance on the reduced salary (the employer also pays less National Insurance) which means that the cost of receiving the benefit is less than if the employee had to pay for it out of their net (take home) pay.
The changes which the Government have announced mean that employees will no longer receive the savings that they currently enjoy for Car Parking or for Sports Membership via a Salary Sacrifice Scheme. It is important to note that the Pension, Childcare and Cycle to Work Schemes offered via salary sacrifice by the University are not affected by this change, as they are protected under the new Finance Act 2017.
How will this affect me?
There are no changes to Pension, Childcare and Cycle to Work Schemes: the University will continue to offer these schemes to you as they currently are and you will continue to save Income Tax and National Insurance.
Car Parking and Sports Membership schemes will be affected, however we have been working with our tax advisors and HMRC to ensure that you can continue to receive Income Tax and National Insurance savings for an extra year to March 2018 provided you renew your membership by 5pm Wednesday 5 April 2017.
Read further information about the changes and steps that you must take if you wish to continue to benefit from the savings on the scheme up to Saturday 31 March 2018.
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