In this update, we report on the forthcoming changes to the tax treatment of salary sacrifice arrangements with effect from 1 January 2012.
Over a year ago, in the case of AstraZeneca UK Limited v HMRC, the European Court of Justice (ECJ) held that VAT was due on the amount of salary sacrificed by employees in exchange for high street shopping vouchers. As a result of this decision, HMRC has indicated in its recently published Revenue & Customs Brief 28/11 that VAT must be accounted for on amounts of salary sacrificed by employees in exchange for relevant benefits from 1 January 2012.
Please see full publication below for more information.