Most companies will have considered salary sacrifice arrangements, most commonly for pensions but also for other benefits.
It is important to remember that salary sacrifice arrangements impact on both tax and employment law, & that to be effective must meet the strict requirements of both.
Salary sacrifice arrangements have become very topical of late. In the summer Budget, the Chancellor announced that the Treasury would actively monitor the effect of such arrangements on tax receipts, leaving the door open for changes in this area.
In addition the most recent decision in the tax case concerning Reed Employment Plc found that the salary sacrifice arrangements did not work correctly and that PAYE/NIC was due.
If you already have salary sacrifice arrangements in place or are considering introducing these then it pays to make sure that they have been done correctly…HMRC scrutiny may increase shortly.
If you would like further information please contact Lesley Sutton on 01484 538351 or email firstname.lastname@example.org.