The Autumn Statement 2016
The Autumn Statement 2016
Charles Russell Speechlys’ partners provided media commentary on today’s Autumn Statement and spending review.
Corporate Tax and Employment, Pensions and Immigration
Commenting on the Chancellor’s announcements on salary sacrifice schemes in the Autumn Statement, Martin Griffiths, Partner at Charles Russell Speechlys, said:
“The Chancellor’s announcement on salary sacrifice schemes, extensively pre-briefed, have been on the agenda for some time after being confirmed in consultation. The government are keen to clamp down on schemes which they perceive to divert money from the Exchequer, but they will hope to avoid criticism for retaining popular workplace benefits such as pensions, childcare vouchers and Cycle to Work schemes”
“However, employers will want to study the rules carefully to consider whether the schemes they offer and the way they operate fit within the new rules announced today”
Salary sacrifice scheme changes announced in the Autumn Statement:
From April 2017, most salary sacrifice schemes will be subject to the same tax as cash income.
In salary sacrifice schemes, employees exchange some of their salary for a non-cash benefit in kind (such as a mobile phone). Both the employer and employee make a tax saving, because the benefit is taxed less than a salary or not taxed at all.
This will affect types of salary sacrifice schemes differently, pensions, pensions advice, childcare, Cycle to Work and ultra-low emission cars will be exempt
All arrangements in place before April 2017 will be protected for up to a year, and arrangements in place before April 2017 for cars, accommodation and school fees will be protected for up to 4 years
Commenting on the implications for private client advisors, Piers Master, Partner at Charles Russell Speechlys, said:
“The Autumn Statement contained little that will have surprised private client advisers.
“We are pleased to see that rumours the Government would introduce anti-forestalling rules did not materialise. These measures could have challenged the ability of our clients to prepare for the April 2017 tax changes to long-term UK resident non-domiciliaries.
“We await with great interest the publication of draft legislation on these changes on 5th December, which we hope will allow affected individuals and their advisers to plan with greater certainty.”
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