Comment on Salary Sacrifice Changes: Is a Gym Membership really a luxury?

Laura Morrison Employment

It’s interesting to read that whilst pension contributions and advice, childcare, cycle-to-work schemes and ultra-low emission vehicles remain exempt from taxation when opted into via Salary Sacrifice, the government has made the decision to tax Gym Memberships and Healthcare from 6 April 2017. Whilst the exemptions are welcome, it would be preferable to see this extended to Gym and Healthcare memberships, and to encourage wider participation in schemes to maintain a healthy workforce.

Such memberships are often paid through company salary sacrifice schemes, which made them more affordable for employees and these incentives will now be taxed as a benefit in kind through payroll.

Our concern is that this is happening at a time when employee’s disposable incomes are feeling the squeeze through pay restraint.

Such a measure may dis-incentivise employees from engaging and making provision through company schemes. This appears counter-intuitive at a time where the Government is trying to encourage a higher degree of corporate responsibility for wellbeing, and specifically on action on improving workplace mental and behavioural health.

There is direct evidence that exercise is key in tackling a number of Government objectives, such as resilience, better mental health and reducing obesity and related diseases which are putting pressure on the NHS.

On the one hand we have positive moves and pro-active steps towards promoting health, such as the Workplace Wellbeing Charter but on the other hand, the new tax measures are a retrograde step and may restrict access for employees looking to take steps in protecting and maintaining good behavioural health, such as regular exercise and access to private talking therapies. These services are often accessed at critical points in the career lifecycle for employees.

We are committed to working with employers to help them put in place programmes which can positively impact and support employee health and wellbeing.