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As reported in an earlier newsletter, the minutes of the 17 April 2008 meeting of HMRC’s Benefits and Expenses Sub Group reveal that there is a potential problem for some salary sacrifice schemes if they do not satisfy all of the statutory conditions on which their respective tax or NICs exemption depend.  For example, the tax exemption that makes the “cycle-to-work” schemes possible requires that the scheme is made generally available to all employees.  If specific groups of employees are excluded from the scheme, the exemption is not met and HMRC’s view is that the salary sacrifice scheme fails, with expensive consequences for the employer.

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Posted November 17th, 2008 | No Comments »

A further series of questions and answers on the operation of salary sacrifice (SS) schemes has been published on HMRC’s website. Some of the questions appear to have been prompted by the recently published guidance on the changes to be made to the provision of benefits-in-kind during maternity leave from October 2008.

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Posted August 18th, 2008 | No Comments »

The value of the benefit-in-kind for used cycles: HMRC only provides guidelines on the reasonable steps an employer should take to establish the second hand value of a cycle. HMRC has never indicated that it would accept 40% of the value when new as reasonable, or any other fixed percentage or figure. HMRC simply expects employers to take reasonable steps to establish the value by consulting, for example, the small ads in the local papers or enquiring at a local cycle shop.

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Posted June 9th, 2008 | No Comments »