Effective January 1, 2012, when an employee in the United Kingdom opts to forgo salary to receive goods or services from his or her employer (a ?ãsalary sacrifice scheme?ÃÂ¥), the employer must account for output on value-added tax (VAT) on these goods and services if the arrangement constitutes a salary sacrifice scheme for VAT purposes. Prior to this change, HM Revenue & Customs had accepted that the reduction in salary under a salary sacrifice scheme did not constitute consideration for the benefits received and output tax was not due. This change is explained in Revenue & Customs Brief 28/11, which is available?áhere.
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Practical Benefits Lawyer
UK: Output VAT Due on Salary Sacrifice Schemes Beginning January 1, 2012
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