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Written question asked by Scott Arthur (Labour) on Friday, 12 June 2026, in the House of Commons. It was due for an answer on Tuesday, 16 June 2026. It was answered by Dan Tomlinson (Labour) on Monday, 22 June 2026 on behalf of the Treasury.

Payroll Deduction Scheme: Taxation

Question

To ask the Chancellor of the Exchequer, what guidance HM Revenue and Customs has issued to employers on the legality and tax treatment of schemes known as grocery salary sacrifice schemes; what steps have they taken to ensure such schemes are structured to comply with existing income tax and National Insurance contribution rules; and whether they plan to issue any further clarification or guidance on the matter.

Answer

HM Revenue and Customs (HMRC) publishes guidance on the tax treatment of salary sacrifice arrangements, including the optional remuneration arrangements rules in the Income Tax (Earnings and Pensions) Act 2003.

Where arrangements are marketed as providing tax and National Insurance advantages, including those sometimes referred to as “grocery salary sacrifice schemes”, the tax treatment depends on the facts of each case and whether the statutory conditions are met. Where they are not, tax and National Insurance will apply in the usual way.

HMRC has taken steps to ensure employers understand how the rules apply by communicating the correct treatment through published guidance and customer channels. This includes an article published in the December 2025 Employer Bulletin, which clarifies the application of the optional remuneration arrangements rules to these types of schemes.

HMRC keeps the tax system under review and will consider whether further communication is required.

Secondary information

Type
Written question
Reference
9412
Session
2026-27
Subjects
Employment National insurance Revenue and Customs Taxation Payroll deduction scheme
Link
View this Written question on www.parliament.uk