Impact on the income tax savings on Salary Sacrifice schemes
As you may have seen in the press following the Autumn statement. The government has made a number of changes which will impact Income Tax savings on Salary Sacrifice schemes. These changes will impact both the Home Technology and Mobile phones schemes as outlined below.
Home Technology Scheme
The government is removing Income tax savings on this scheme from April 2018. Meaning that if you join the scheme now or before April 2017 you will benefit from any the ability to save some income tax on salary sacrifice until April 2018 so long as you return the product(s) at the end of the scheme. You will still retain employee national insurance savings which are not affected by the government changes.
In reality under the previous salary sacrifice legislation at the end of the scheme if you kept the product(s), income tax would have been paid in full to HMRC leaving National insurance savings. So as this is the route most employees take the impact of the autumn statement is less significant on this scheme.
Mobile Phone Scheme
The mobile phone scheme is more significantly affected by the governments autumn statement as income tax is currently saved in full on the total value of a single mobile phone provided for personal use. The government is removing Income tax savings on this scheme from April 2018. Meaning that if you join the scheme now or before April 2017 you will still benefit from the ability to save income tax on salary sacrifice until April 2018. (Up to approximately 16 months). You will still retain employee national insurance savings which are not affected by the government changes.
In summary you can continue to benefit from National insurance savings (12% standard rate taxpayers / 2% higher rate taxpayers) on these schemes. Income Tax savings will be removed on both schemes however if your signing up now you can still benefit from up to 16 months of Income tax savings as our schemes are run over 2 years. You will also benefit still from repaying your employer over 24 months from your salary and any upfront discounts provided on the products versus the high street.