Does HMRC need to know about salary sacrifice?
You don't need to tell HMRC anything about your salary sacrifice pension arrangement. We've got that covered!
Why not?
It's all about contracts, not taxes:
- Salary sacrifice is a change to your employment contract with us.
- It's not a separate tax arrangement that HMRC needs to track.
- We handle all the tax calculations automatically through payroll.
- HMRC sees the result, which is your reduced salary.
What happens behind the scenes?
- You agree to salary sacrifice - this changes your contract terms.
- We reduce the contract income we receive for you by the agreed amount.
- We pay that amount to your pension as employer contributions.
- Our payroll system calculates tax and NI on your new, lower salary.
- HMRC gets the normal payroll reports showing your adjusted salary.
Salary sacrifice keeps things simple - no extra reporting, no complications, just automatic tax savings!