Salary sacrifice schemes are becoming more and more popular amongst employers and employees. The scheme allows the employee to sacrifice part of his or her’s salary (classed as cash benefit) in return for a non cash benefit.
Typically types of salary sacrifice non cash benefits include additional employer pension contributions and childcare vouchers. Salary sacrifice arrangements are also possible for company cars, cycle-to-work schemes, parking at or near the workplace, and work-related training.
The idea is that these benefits reduce the amount of tax you and your employer pay by allowing you not to be taxed on the part of your salary that you sacrifice. For this reason, salary sacrifice can only be used for certain tax free items.
If you are looking at doing this then you should consider the negative effects it may have on your financial situation. Your P60 will show that you have earned your salary less the part you have sacrificed therefore getting a mortgage or a loan could prove difficult.