Autumn statement 2016 - Implications to Employment Tax Services
The government have confirmed that from April 2018, the recommendations made by OTS will be introduced. This limits the tax and NIC free element to £30,000 and terminates any special rules for overseas earnings/retirement on health grounds.
To paraphase Mark Twain, the demise of share schemes has been greatly exaggerated. Philip Hammond appeared to say in his speech today that all share incentive schemes, other than the four approved ones, would lose all their tax advantages.
In fact all that has happened is that the CGT and income tax relief that remained on 'Employee Shareholder Status' after they were drastically clipped in March 2016, has been removed for shares issued on or after 1 December 2016.
Salary sacrifice (excluding pensions, bike to work and child care)
Other than arrangements relating to child care, bike to work and pensions (including advice), the tax and National Insurance advantages of the salary sacrifice scheme will be removed from April 2017. However, for those in schemes, there is a roll-out period which for most arrangements ceases April 2018. But for cars, accommodation and school fees, they will remain protected until April 2021.
Off-payroll working in the public sector
The government announced their tightening of arrangements for those providing service in the public sector via a personal service company. From April 2017, those engaging will need to be comfortable the arrangement meets the HMRC criteria (which is due to be clarified). If not, Tax/NIC will need to be withheld on payments made.
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