Sorry. You need to upgrade your browser

You are using Internet Explorer 8

This is considered an out of date browser. This website has been developed with modern browsers in mind to allow it to display at its best in a wide variety of viewing situations - including mobile viewing. But we haven't supported older browsers like IE8. Please upgrade to the latest version of Internet Explorer - or try Mozilla Firefox or Google Chrome. Both are excellent browsers.

Thank you.

Chartered Certified Accountants
and Business Advisors

01530 267320

Salary Sacrifice

A salary sacrifice scheme involves an employee giving up some of their gross pay in exchange for something in return, usually where the taxable value of the perk is less than the salary sacrificed. This produces both tax and NI savings for both the employee and employer.

 

Anti-avoidance rules took effect on 6 April 2017 and apply to schemes set up or amended on or after that date. However, the rules don’t apply to schemes that were in place before then, that is until 6 April 2018.

 

Where the taxable value of a perk is greater than the salary given up, the taxable amount is worked out using the usual tax rules for benefits in kind, but ignoring exemption. Equally, if the salary given up is greater than the taxable value of the perk then the taxable benefit is equal to the salary.

 

Making good benefits is where an employee makes a payment from their own funds (often by deduction from their net pay to their employer in return for being provided with a perk. The amount paid reduces the taxable amount of the benefit.

 

Making good is ignored for the purpose of deciding if the amount taxable under the anti- OPRA rules is the salary sacrificed or the taxable amount of the benefit, but is deducted to arrive at the final amount of benefit to be declared on form P11d.

11 Jun 2018

« Back to latest news

Latest news

P11d and P11d(b) Filing and Payment Deadlines

Remember, you need to tell HMRC about any Class 1A National Insurance Contributions (NICs) for the tax year ending 5 A...

Click to read more >

First Soft Drinks Industry Levy return due in July

If you are a packager of drinks that are liable for the Soft Drinks Industry Levy (SDIL) you are required to send a retu...

Click to read more >

Cycle to work scheme

The cycle to work scheme allows your business to provide employees, including directors, with the loan of a bicycle and ...

Click to read more >

Changes in advisory fuel rates from 1 June 2018

These advisory fuel rates apply for all journeys undertaken on or after 1 June 2018. You can use the previous rates for ...

Click to read more >

Do you always have to issue a VAT invoice?

It’s no coincidence businesses that poor records and paperwork are more likely to fail. Tax rules, especially those fo...

Click to read more >

Salary Sacrifice

A salary sacrifice scheme involves an employee giving up some of their gross pay in exchange for something in return, us...

Click to read more >

Help-to-save scheme postponed

The government help-to-save scheme, which was due to be ready on 6 April 2018 has now be postponed and will not be in op...

Click to read more >

New scale for VAT on fuel

HMRC has released details on the flat rate charges for car fuel. If you’re VAT registered you can use the scale charge...

Click to read more >

Tax-free aid

Working from home is becoming increasingly common! There are few special tax provisions to help employees and employers ...

Click to read more >

How can we help?

 

Submit

Testimonial

The team at Sence have been so helpful and understanding from the moment I started to use their services.

Natalie Bancroft
Red Door Studios

Click to read the full testimonial >