HMRC has launched an attack on work perks which are currently being offered to millions of staff across the UK. In essence, these work perks are designed to reduce tax bills and their growth represents an increasing cost to the exchequer.
UK companies are currently using their bulk buying power to provide employees with the chance to purchase discounted cars, laptops and mobiles from their gross salary, allowing them to pay less tax. This means that staff at larger firms are more likely to benefit than those at smaller ones.
There has therefore been a new consultation to reform salary sacrifice schemes which allow employees to swap chunks of their salary for taxable or non-taxable perks.
For example, a £700 mobile phone contract bought through a salary sacrifice scheme would save a higher tax rate employee £294 and their employer would also save £97. The total cost to the exchequer would be £391.
Please contact Michael Burgess on 01782 279615 if you have any queries.