Changes to VAT on salary-sacrifice arrangements come into force

Implementation date: 1 January 2012

For salary-sacrifice agreements made on or after 28 July 2011, output tax is due on the amount of the employee's salary waived in return for taxable benefits. For salary-sacrifice agreements made before 28 July 2011 and continuing after 31 December 2011, output tax is due only on the occurrence of a specified event. Further guidance is available in Revenue & Customs Briefs 28/11 and 36/11 (on the HMRC website).