HMRC has launched an attack on work perks

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HMRC has launched an attack on work perks which millions of staff at UK firms take advantage of to reduce their tax bills. The taxman has launched a consultation to reform salary sacrifice schemes, which let employees exchange part of their salary for taxable or non-taxable perks.

The arrangements let staff access goods and services at a discounted price and reduces their tax bill by letting them pay for items before tax is deducted from their salary.

For example a £700 mobile phone contract bought through a salary sacrifice scheme would save a higher-rate taxpaying employee £294 and their employer would also save £97. The total cost to the exchequer would be £391.

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