The rules for salary sacrifice arrangements changed with effect from 6 April 2017 and HMRC have updated their guidance for employers. Apart from 5 exceptions the amount assessed as employment income for new salary sacrifice arrangements is now the greater of the salary foregone and the taxable benefit as set out in the tax legislation.

Fortunately, the most common arrangements are unaffected by the changes – childcare vouchers; pension contributions; cycle to work schemes; ultra low emission cars; retraining and buying annual leave are all still possible under valid salary sacrifice arrangements.

The HMRC guidance reminds us of the importance of amending the employee’s contractual salary before the next salary payment. Remember also that the employee’s salary cannot be reduced below National Minimum Wage.

As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.