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HM Revenue & Customs (“HMRC”) have published guidance on the impact of salary sacrifices on statutory payments.

A salary sacrifice arrangement allows employees to give up taxable earnings in return for benefits or payments that are not taxed or subject to national insurance. In the right circumstances, it can yield large savings for employees (and sometimes employers).

The guidance, issued in the form of a number of questions and answers, covers a range of issues including:

• what is needed to make a salary sacrifice successful;
• when changes can be made to agreed arrangements; and
• the effect on SMP, SSP and pension contributions and the interaction with minimum wage legislation.

The guidance is available at http://www.hmrc.gov.uk/specialist/sal-sac-question-and-answers.htm; if you would like to discuss how salary sacrifice might work for you, please contact Cathy Corns or me.