Salary Sacrifice Update

Can independent schools keep their school fee salary sacrifice schemes in place?

Update on the draft legislation (as of 29 June 2017)

Following the Spring Budget on 8 March the updated Finance Bill 2017 was published on 20 March 2017 and became law on 27 April 2017.  The legislation addressed most of the concerns raised by schools and their representatives on the practical issues associated with the changes to salary sacrifice for school fees. Previously the draft legislation stated that the protection to April 2021 would be lost if there was a variation or renewal of the agreement. The concern was that this would mean the value of the sacrifice would have to remain static over the next four years and increases in fees could not be taken into consideration, otherwise the changes would amount to a variation or renewal to school fee agreements which would result in the loss of the ‘grandfathered’ right to continue in the scheme until April 2021.