Companies could be open to investigations from HMRC after European judges ruled AstraZeneca must account for VAT when passing on shopping vouchers to staff in salary sacrifice schemes.

The company had previously bought the vouchers with VAT included and then recovered the tax before handing them over to staff. However, the European Court of Justice said giving staff vouchers which could be used to buy goods and services represented a “supply”, and that VAT is due on the amount of salary sacrificed.

The decision could cost employers over £100m per year, with an additional £500m due if HMRC look to collect VAT from the last four years.

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