Smith & Williamson news alert: salary sacrifice and VAT | 30 July 2010

The European Court of Justice has released its final decision in the case of AstraZeneca which will have significant implications for a number of businesses.

 

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AstraZeneca - salary sacrifice case

 

The European Court of Justice (ECJ) has just released its final decision in the case of AstraZeneca (AZ) which will have significant implications for a number of businesses.

 

The ECJ has essentially followed the arguments of HMRC and ruled that AZ is making a supply of services (of the vouchers) to its employees and it must account for VAT on the cash received (the salary sacrificed) for those vouchers. However, AZ is entitled to reclaim the VAT incurred on the purchase of the vouchers.

 

If your business has a salary sacrifice scheme which offers retail vouchers and any other options which are not VAT exempt yesterday's decision could have an impact.

 

 

Read the full news article here.

 

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    Tim Lyford
    Head of Corporate Tax
    publications@smith.williamson.co.uk 

 
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