Salary sacrifice – car parking (amendment to previous messages)

March 15, 2018

Further to previous messages regarding the removal of the salary sacrifice scheme for car parking (originally announced in the government’s 2016 Autumn Statement) payroll have received clarification that the scheme is not being totally withdrawn but is being reduced  (only the tax relief element of the scheme is being withdrawn).

Consequently with effect from 1 April 2018, any staff signed up to the salary sacrifice scheme will still be a member of that scheme, and will continue to receive the benefit of a reduced national insurance contribution and pension deduction (if they are a member of the NHS pension schemes) but will no longer receive the 20% tax relief on their car park permit charge.

For a standard lower rate tax payer this will mean a reduction in take home pay of £3.50 per month, rather than the £5.60 originally stated in previous messages.