Salary sacrifice is by far the most popular tax efficient staff benefit structure across all employer sectors and across all employer sizes either as stand-alone arrangements or within a wider flexible benefits scheme or even as part of a Total Reward culture.

As good as these arrangements can be, we have commented many times before on how things can, and often do, go wrong when appropriate care is not taken in setting up or running the scheme. This article covers the potential tax issues but there are other non-tax related issues that have to be considered as well, such as employment law and HR. Failure to bottom out these issues can prove to be catastrophic to the business and can result in a totally failed scheme which can be both embarrassing and costly to the business.

We work with many employers and benefit consultancy and providers in this area.


What support can Optimum PAYE provide ?

  • Feasibility
    • High level review to identify potential 'showstoppers', level of savings, technical issues, etc
  • Design
    • Support in deciding how the arrangements will operate including documentation, timing, systems, third party providers, legals, etc
  • Employee communications
    • All stages from documentation to roadshows to one-to-one sessions
  • Tax Risk
    • Review of all scheme documentation. Full disclosure to HMRC and subsequent discussions to obtain favourable HMRC approval
  • Project management
    • Full hands-on support from project start to finish where required
  • Salary sacrifice audit
    • As highlighted in our recent blog, this is recommended for all employers operating salary sacrifice arrangements. Our audit service identifies any risk areas on established schemes and offers advice in how to make the arrangements more robust and/or attractive to staff going forward
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