The decision of the First-Tier Tribunal in Reed Employment provides useful guidance on what constitutes an effective salary sacrifice and a contract of employment for ITEPA 2003 purposes. The Tribunal confirmed that a valid salary sacrifice scheme could be made in respect of a reimbursement of expenses. However, any arrangements must be reciprocal and clear. This means that the employee must both understand the scheme and make an informed decision whether to enter into it. This will be undermined evidentially if employees obtain no real benefit from the scheme.
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