“It remains to be seen how widely HMRC might construe it with regard to other types of benefit,” explains Gary Hull, tax director – HRS Employment Solutions at PricewaterhouseCoopers.

“Pending HMRC publishing its views, businesses need to be aware of the ECJ's judgment and consider any potential impact on salary sacrifice arrangements in place. In respect of cars provided by means of salary sacrifice, employers should be able to rely upon the UK domestic legislation to maintain the current treatment.”

This legislation prevents the taxation of salary reductions in respect of company cars. This would need to be amended if salary sacrifice cars are to be impacted by the ECJ ruling.

“This case is around vouchers but Revenue may use the case to look at other areas of salary sacrifice,” added Mazar’s Alastair Kendrick. “There is an inference that it could apply to all salary sacrifice schemes, but we have to wait and see what HMRC intends to do. It is too early to draw any conclusions.”

HMRC is expected to confirm how it will interpret the ruling in the autumn.