Legislation will be introduced in the Finance Bill 2010 to amend section 317 of the Income Tax (Earnings and Pensions) Act 2003, which provides an exemption from tax on the benefit of free or subsidised meals provided by an employer in its workplace canteen. The exemption will be restricted where an employee is entitled to the meals as a result of entering into a salary sacrifice scheme or other flexible benefit arrangement. The measure will come into effect on 6 April 2011.

See 2009 Pre-Budget Report - PBRN 25 - Salary sacrifice: Restricting the tax exemption for workplace canteens.