Salary sacrifice and canteen arrangements
HMRC have explained why they are challenging the arrangements put in place by some employers who have combined salary sacrifice schemes with work based canteen facilities.
These arrangements seek to make use of the exemption for free and subsidised meals provided in a canteen oron the employer’s business premises, subject to the satisfaction of certain conditions.
HMRC do not accept that all such arrangements have been implemented in accordance with the law as it stands. With effect from 6 April 2011, the law changes as a result of legislation introduced in the 2010 Finance Act. There will no longer be an exemption for work place meals provided as part of salary sacrifice or flexible remuneration arrangements.
HMRC have issued a series of questions and answers addressing the interaction of the new rules and HMRC’s existing technical arguments.