Posts Tagged ‘Salary Sacrifice’

Salary Sacrifice–Minimum Time?

Clock Flickr Dee'Lite SmallWe’ve been getting a number of questions from our clients regarding the minimum amount of time that a salary sacrifice agreement must be in place for.

This has come into sharper focus when looking at the new pension rules from October 2012 that will mean that employers have to automatically enrol employees into a workplace pension. Well those all round good eggs at HM Revenue & Customs have kindly produced an FAQ on the subject.

You can read the document here in all it’s glory.

The interesting part is when they discuss the new rules. HMRC says:

“Consequently, it is not necessary to stipulate a period for which the arrangement must be entered into or to set out "lifestyle changes" in relation to salary sacrifice for the workplace pension scheme.”

That’s good news for employers who have often struggled to define “lifestyle changes” to their employees. It also helps to reassure employers that they won’t be liable for a tax bill if the employee opts out of salary sacrifice.

It’s worth remembering that salary sacrifice needs to be established carefully and is a balance between changing your employees contracts and altering your benefit contributions. As always, it’s worth making sure that you get some advice when setting up a new arrangement.

Steve Clark

Salary Sacrifice & VAT – Chapter & Verse

Many of our clients have asked us for some guidance on the affect that the decision in the AstraZeneca case will have on the benefits they offer through Salary Sacrifice.

It’s been an area of some confusion regarding the impact that this will have on benefits such as pension contributions and Childcare Vouchers.

We are indebted to Dechert LLP for their legal update on this very subject. You can click through to it here.

It’s a really good summary of what’s affected and what isn’t. However, as always, if you’re unsure you’ll need to get advice from your own tax advisers.

If you don’t regularly use a tax adviser and would like us to introduce you to one of the firms we work with please let us know.

Steve Clark