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Salary sacrifice is a change to an
employee’s contractual pay entitlement. It
often involves the giving up of some
entitlement to pay in return for some
other form of benefit, such as employer
pension contributions or childcare
vouchers. Depending on the sort of benefit
involved, tax and/or National Insurance
savings can often result for both the
employer and employee.
Following changes in the law in 2008 on
what benefits employers must provide to
employees during Additional Maternity
Leave, HMRC published guidance on
Statutory Maternity Leave and salary
sacrifice. Similar changes took place in
respect of employees on adoption leave. In
the recent HMRC Employer Bulletin they
provided a link to the guidance.
The guidance also covers what non-cash
benefits should be provided to employees
during Statutory Maternity Leave.
HMRC have confirmed, following requests
from employers, that they plan to publish
further guidance on their website,
including the tax and NICs implications of
providing non-cash benefits, in-year
recording and end of year reporting of
these complex areas.
If you would like to discuss these
issues in more detail or the opportunities
afforded by salary sacrifice more
generally, please do get in touch.
Internet link:
HMRC guidance on salary sacrifice |
