Call Us :  0333 4141920  | Email: admin@nashharvey.com 


Waivers of remuneration
12/11/2019

A waiver of remuneration happens when a director or an employee gives up their right to salary or other cash remuneration and gets nothing in return. Where the employee gets a non-cash benefit in return, this is called a salary sacrifice.

The treatment of a waiver of remuneration, when a director / employee gets nothing in return, is different to the scenario when this is treated as a salary sacrifice.

The effect of a waiver for Income Tax purposes depends on its timing.

  • If the remuneration waived is given up before it is treated as received for employment income purposes, then the remuneration given up will not be taxable earnings.
  • If the remuneration waived is given up after it is treated as received for employment income purposes, then the employee remains taxable on the remuneration given up.

The view taken by HMRC is supported by case law decisions, including the cases of Parker v Chapman (13TC677) and Reade v Brearley (17TC687) quoted in the Employment Income Manual.


Maidstone Office


The Granary, Hermitage Court Hermitage Lane
Maidstone
ME16 9NT
 
 
 
This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel: 0333 4141920

London Office


Studio 1
305a Goldhawk Road
London Office
W12 8EU
 
 

This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel: 020 8746 3708

Ashford Office

 
Suite 13 Letraset Building
Wotton Lane  Ashford
Kent
TN23 6FL
 
 

This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel: 0333 4141920

Membership

Nash Harvey Group LLP is a limited liability partnership registered in England
Reg No: OC376161 | VAT Number: 137 7621 01
Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales.