A European court tax ruling may mean that company cars schemes are more expensive to run, Deloitte has said.
Since January, companies have had to pay VAT on non-cash goods and services provided to employees in exchange for some of their salary, HMRC announced.
Employers will still be able to reclaim tax paid to suppliers for the goods and services as input tax.
The change to the VAT treatment of salary sacrifice schemes, which often include such as bikes, childcare vouchers, and high street shopping vouchers, follows a ruling last year by the European Court of Justice (ECJ) over a tax dispute between AstraZeneca UK and HMRC (Case C-40/09).
The case involved retail vouchers provided to employees as part of a remuneration package.
Astra bought retail vo...
About Nick Huber
I’m a specialist business journalist and have a particular interest in tax and technology.