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HMRC internal manual

Non-statutory Clearance Guidance

Clearance arrangements: salary sacrifice arrangements and clearance applications

It is entirely a matter between employee and employer how the former is rewarded for their services. This is not an arrangement that is covered by tax law.

Pre-transaction, HMRC will not give a clearance to indicate one way or another whether the proposed changes to the terms and conditions of employment relating to pay, the salary sacrifice arrangement, will achieve what the employer or employee intend. The applicant should be pointed towards our guidance in the Employment Income Manual.

However like any other amendment to an employee’s terms and conditions of employment we would recommend that expert legal advice is sought to ensure that the contract achieves the outcome intended for both the employer and employee.

Post-transaction HMRC can advise on the tax and NIC consequences of the changes made to the contract (but not the contractual arrangement itself) if there is sufficient uncertainty.

In cases of difficulty, advice can be sought from the Solihull Technical Helpline in the normal manner.