Sacrificial Lambs

19 May 2005 / Philip Fisher

Issue: 4008 / Categories: Comment & Analysis , Income Tax

PHILIP FISHER outlines the tax and National Insurance advantages of the provision of certain benefits in kind via a salary sacrifice scheme

THE SALARY SACRIFICE is back in fashion. This follows quite a long period when many companies and employees were wary of such schemes. The strict interpretation of the law by HM Revenue & Customs (HMRC) following the decision in the case of Heaton v Bell 46 TC 211 and the consequent tax risks inherent in such arrangements put many people off.

Now though things have settled down considerably and the Department of Trade and Industry (DTI) through its home computer initiative is actively encouraging employers to enter into one kind of arrangement with their employees involving salary sacrifices.

Information on the DTI scheme is available on the internet.

It almost goes without saying that in the world of tax things are never quite as simple as they seem and this article has been written with the intention of informing those thinking of entering into these...

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