EIM42773 –Salary sacrifice:
request to HMRC to approve arrangements after implementation
Section 62 ITEPA 2003
For an explanation of what a salary sacrifice is see
EIM42750.
HMRC does not give advice on salary sacrifice arrangements
before they have been implemented. (see
EIM42772)
There is no requirement for employers to inform HMRC that
they have adopted a salary sacrifice arrangement. However, many
employers will do so for reassurance that they are accounting for
the correct amount of income tax and NIC. HMRC may agree that
changes to employment terms and conditions affect the
employees’ entitlement to earnings for tax and NICs purposes.
Agreement is given on the understanding that it will cease to apply
if there are further changes to the contract.
Sight of the following documents should establish whether the
salary sacrifice is effective. See
EIM42769 and
EIM42770 for information on the
relevance of these documents.
- the contract variation for one employee who has
agreed to the changes. If the employer is introducing a number of
options for employees, then the contract variation for each
different option. (See
EIM42753)
- the original contract of employment if it is not
clear what are the terms and conditions of the employment
- a payslip before and after the variation (See
EIM42770)
- the agreement between the employer and the benefit
(or voucher) provider
- if the benefit involves pension contributions then
information on the pension scheme including whether it is
registered and if so its pension scheme tax reference number at CAR
Pensions Schemes Services
- all other documents relevant to the scheme, for
example any booklet issued to the staff as a full guide to the
scheme
If the employer informs you that arrangements have been approved
by HMRC in respect of another employer you should request:
- information and sight of the relevant documents
explaining why it is considered that the same arrangements have
been approved and
- confirmation that the arrangements implemented by
the other employer are identical.
