COVID-19 – Updated Guidance re Life Events for Salary Sacrifice Arrangements

20th April 2020

In light of the COVID-19 Pandemic, HMRC has updated it’s guidance for employers who offer salary sacrifice arrangements.

 

Under the terms of a salary sacrifice arrangement, a ‘life event’ is a permitted reason to break the arrangement mid-term.  Previously the list of life events was limited to marriage, divorce, and a partner becoming redundant or pregnant.  HMRC has amended its guidance to include ‘changes in circumstances directly arising as a result of COVID-19’.

 

Where an employer wishes to maximise the amount of an employee’s pay that will be covered by the Coronavirus Job Retention Scheme, the employer and employee(s) may agree to terminate the salary sacrifice arrangement as part of the furlough arrangement.

 

Further details can be found here: https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye



 
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