How to Stay Safe from HMRC
For some benefits (e.g. Cycles, Childcare Vouchers, Workplace Car Parking etc.) there are significant tax and NIC savings to be made if the salary sacrifice element of the flexible benefit package is documented correctly. Our consultants will ensure all of the supporting documentation is thoroughly reviewed to avoid any potential snags and then full disclosure of the scheme is made to HMRC for their approval.
HMRC review salary sacrifice schemes as part of their PAYE audits to check that they are being operated as described at the time approval is obtained. Many employers simply fail to get the basics right; including ensuring that any salary sacrifice is effective in the first place, that any desired tax exemptions are properly due, or that a fully effective (i.e. cards face up on the table) dispensation or agreement with HMRC is achieved. Others fail to provide effective communications to staff (including badly designed payslips), resulting in general confusion and limited employee take up. There may be significant tax and NIC penalties to be imposed if the scheme has not been designed properly (e.g. following ineffective ‘cut and paste’ principles) or has strayed from the original design. Our consultants can perform high level reviews of existing schemes to ensure that they are tax compliant.
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