The recent decision from the First-tier Tribunal case of Reed Employment plc (and other Reed Group companies) v HMRC has far reaching ramifications for employers with salary sacrifice arrangements.
Companies should use the recent Reed case ([2012] UKFTT 28 (TC)) to review their current salary sacrifice schemes making sure they are robust. The case highlights potential pitfalls around salary sacrifice and shows that employment contractual arrangements are as important as the tax considerations.
The key point in the case was the employment tax treatment of a travel and subsistence arrangement that was purported to be a salary sacrifice arrangement.
The First-tier Tribunal considered that daily payments Reed made to cover lunch and commuting to...
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