Salary sacrifice challenge – Aon Employee Benefits

Employers need to consider all communications on their flexible benefit scheme enrolments carefully in the run up to Christmas as the government consults on potential changes in salary sacrifice arrangements, according to consultant Aon Employee Benefits. The taxation treatment of salary sacrifice benefit may be about to undergo the most radical change for over ten years and employers will need to reflect these in benefit scheme design.

Martha How, Reward Partner for Aon Employee Benefits, said:

‘This timing challenge is likely to impact the majority of employers. For Aon alone, this enrolment period (between September and December 2016) represents 60% of our flexible benefit clients. Employers have a real concern for employees who will be making benefit selections when the tax and NIC situation is still unclear.’

The Chancellor is expected to announce changes to the treatment of certain salary sacrifice benefits during his Autumn Statement.