Purchase schemes by salary sacrifice are VATable

legal updates

The European Court of Justice has given a wide ruling that most schemes where employees can take salary sacrifice to receive beneficial vouchers.

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The European Court of Justice has given a wide ruling that most schemes where employees can take salary sacrifice to receive beneficial vouchers eg retail vouchers attract VAT.  

A company Astra Zeneca offered £10 retail vouchers for purchases from selected shops.  The salary deduction was less than the face value amount (ranging from £9.25-£9.55).  Astra Zeneca were forced to pay VAT which takes away all of the incentive.

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