Government to gather evidence on salary sacrifice

parliamentAutumn Statement 2015: The government will continue to consider what action, if any, will be taken around salary sacrifice arrangements.

It will gather further evidence, including from employers, to inform its approach to salary sacrifice arrangements.

In the Spending review and autumn statement 2015 policy paper, the government expresses its concern at the growth of salary sacrifice arrangements.

Although no immediate action is being taken, the policy paper echoes the sentiments expressed in the Summer Budget 2015, when the government stated that it would actively monitor salary sacrifice schemes and their impact on tax receipts.

John Harding, employment tax partner at PricewaterhouseCoopers, said: “Salary sacrifice arrangements are very popular and widespread. Used correctly they are a benefit to both the employer and the employee.

“While it is unlikely that HM Revenue and Customs (HMRC) would outlaw salary sacrifice, employers should be aware of HMRC’s increasing interest and use the time now to ensure they have been implementing their salary sacrifice arrangements correctly in light of HMRC’s increased focus in this area.”