Benefits that lose tax-free status from April 2018

Source: HM Revenue & Customs | | 07/03/2018

The tax and NIC advantages of certain benefits provided as part of a salary sacrifice arrangement changed from 6 April 2017. When the changes were introduced it was confirmed that all arrangements in place before April 2017 will be protected for up to a year. This means that current contracts that remained under the pre-2017 rules will now fall under the new rules from April 2018.

The new rules effectively remove the Income Tax and employer NIC advantages of certain benefits provided as part of salary sacrifice arrangements such as mobile phones and workplace parking. The April 2018 deadline is extended until April 2021 for cars with CO2 emissions above 75g/km, accommodation and school fees. Where an existing contract is varied, renewed or modified then the new rules apply.

The following benefits are not currently affected by the new rules:

  • Employer provided pensions and pensions advice
  • Childcare vouchers
  • Employer provided childcare or workplace nurseries
  • Bicycles and cyclist safety equipment including cycle to work schemes, and
  • Ultra-low emission cars, below 75g/km

Employers and employees are still free to use salary sacrifice, but with the tax and Class 1A NICs advantages removed. Employees can reimburse their employer for the cash value of any benefit, after the end of the relevant tax year.

Planning note

If you need any assistance in preparing for the changes from April 2018 then please do not hesitate to get in touch before time runs out.

Accountancy service

“Are you feeling confused about how to comply with HMRC’s accountancy requirements?


Your business

Your business

Are you a Start-up business? Are you a little confused about the different types of companies? 


Virtual Director

Virtual Director

Are you looking to grow your business? A Virtual Financial Director can help you take your business to the next level.




Ensure that your business has the edge over your competitors and incorporate Xero into your business, today!


Latest News

Ken Dodd has the last laugh
21/03/2018 - More...
The recent death of the comedian, Sir Ken Dodd, aged 90, would not usually be

Self-catering and holiday let business rates
21/03/2018 - More...
One important aspect of a self-catering or holiday let business that should not

HMRC tackling online VAT fraud
21/03/2018 - More...
Under new rules that came into force on 15 March 2018, HMRC has enhanced powers

Search News


With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login