HMRC has launched an attack on work perks

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.