GLA clamps down on salary sacrifice abuse

The Gangmasters Licensing Authority (GLA) said today (February 17th) that it will revoke the licenses of employers who use salary-sacrifice arrangements to abuse tax-free allowances for workers, HR Magazine reports.

It claims that if employers use salary-sacrifice schemes to avoid the requirement to pay national minimum wage, the prohibition of work-finding fees and the requirement to accurately calculate and pay tax and National Insurance, they will have their licenses revoked.

This stance has been developed in response to the increasingly prevalent use of popular and beneficial salary-sacrifice schemes, where workers are encouraged to sacrifice a portion of their wages for the subsidised purchase of, for example, travel.

HR services provider Staffline claims that the overall cost to the Treasury of the illegal use of this loophole is £0.5 billion.

Andy Hogarth, Staffline''s chairman and chief executive, said: "We welcome today''s announcement from the GLA, which further highlights the misuse of salary-sacrifice schemes to undercut those not using the schemes and is an encouraging step towards ensuring workers receive the wages and benefits that they are due." Back