Salary sacrifice for groceries
Discussion
I've noticed social media posts recently promoting a salary sacrifice scheme for groceries, similar to the one described here: https://www.mintago.com/salary-sacrifice/grocery-s...
The idea is that you sacrifice a portion of your salary in exchange for a grocery card, which lets you avoid national insurance contributions. This means you end up with slightly more to spend on groceries than the amount you actually sacrificed.
Does anyone know if this is legal? It seems almost too good to be true, and if it were, I feel like this would have been more common a long time ago.
The idea is that you sacrifice a portion of your salary in exchange for a grocery card, which lets you avoid national insurance contributions. This means you end up with slightly more to spend on groceries than the amount you actually sacrificed.
Does anyone know if this is legal? It seems almost too good to be true, and if it were, I feel like this would have been more common a long time ago.
This is a very thin ice subject.
For context, I've previously been involved with workplace behaviour change schemes that used incentive to motivate change. This was around recycling and and eco-based behaviours. If certain targets were met, teams would receive rewards in the form of shopping vouchers and the like.
I cannot see or understand how Mintago or others can claim legal avoidance of National Insurance. NI is calculated on salary including cash and cash equivalent payments. Benefit-in-kind doesn't apply to Salary Sacrifice.
There some exceptions; performance related prizes, behavioural incentives (such as those I was involved with) as well as government schemes like cycle to work. However, the value of these are capped, they have to be evidentially linked to a specific activity and cannot be classified as part of you salary, only as and add-on benefit.
So grocery cards can be provided to individuals as a reward for excellent performance, but (as far as I can tell), not as a permanent part of their salary package unless the value is included within the tax calculations. As the company will be purchasing these cards as a bulk order and no doubt assigning them as an operational expenditure, I presume there is some additional benefit to them on Corporation Tax.
They seem to be increasing in number so I assume there is some loophole or allowance that I'm not aware of but if the former, I would imagine at some point this will be firmly closed and some claw back on NI payments from employee and employers will follow.
I certainly wouldn't be offering or accepting them.
For context, I've previously been involved with workplace behaviour change schemes that used incentive to motivate change. This was around recycling and and eco-based behaviours. If certain targets were met, teams would receive rewards in the form of shopping vouchers and the like.
I cannot see or understand how Mintago or others can claim legal avoidance of National Insurance. NI is calculated on salary including cash and cash equivalent payments. Benefit-in-kind doesn't apply to Salary Sacrifice.
There some exceptions; performance related prizes, behavioural incentives (such as those I was involved with) as well as government schemes like cycle to work. However, the value of these are capped, they have to be evidentially linked to a specific activity and cannot be classified as part of you salary, only as and add-on benefit.
So grocery cards can be provided to individuals as a reward for excellent performance, but (as far as I can tell), not as a permanent part of their salary package unless the value is included within the tax calculations. As the company will be purchasing these cards as a bulk order and no doubt assigning them as an operational expenditure, I presume there is some additional benefit to them on Corporation Tax.
They seem to be increasing in number so I assume there is some loophole or allowance that I'm not aware of but if the former, I would imagine at some point this will be firmly closed and some claw back on NI payments from employee and employers will follow.
I certainly wouldn't be offering or accepting them.
Voldemort said:
Something something luncheon vouchers something.
Different thing. Established post war to encourage healthy eating and boost economic activity. They were free of tax and NI but had a relatively low value and the amount was capped per employee. Amazingly lasted until 2013!Edited by StevieBee on Friday 8th November 08:27
Edited by StevieBee on Friday 8th November 09:10
StevieBee said:
Different thing. Established post war to encourage healthy eating and boost economic activity. They were free of tax and NI but had a relatively low value and the amount was capped per employee. Amazingly lasted until 2013!
Google Cynthia Payne…Edited by StevieBee on Friday 8th November 08:27
Edited by StevieBee on Friday 8th November 09:10
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