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Posted Sat, 18 Jun 2022 09:33:42 GMT by Joziboy
Hi HMRC- Just like a small company is able to pay a child are provider directly and deduct from the gross salary, I presume that they can lease a car directly and deduct, without having to use a salary sacrifice car scheme? I don’t see any issue with this but cannot find a clear answer anywhere. Understandably the schemes all want our business so make as if we have to use them! Grateful for your clarification.
Posted Mon, 20 Jun 2022 10:34:56 GMT by HMRC Admin 17

Hi,
 
Overview

A salary sacrifice is simply an agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit.
The schemes mentioned in your question are not mandatory to put a salary sacrafice in place .

As an employer, you can set up a salary sacrifice arrangement by changing the terms of your employee’s employment contract.

Your employee needs to agree to this change.

A salary sacrifice arrangement must not reduce an employee’s cash earnings below the National Minimum Wage (NMW) rates.

Employers must put procedures in place to cap salary sacrifice deduction and ensure NMW rates are maintained.

General  information on salary sacrafice can be found here:

Salary sacrifice for employers

Optional renumeration guidance can be found here:

Optional remuneration arrangements (480: Appendix 12) .       

If you require further information please contact the EHL to discuss. on 0300 200 3200    .

Thank you.

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