Hang on a minute... (regarding cycle 2 work)

portland_bill

Apologies if I'm being over-cautious here but I simply don't trust either HMRC or Employers (in general) so I'm purposefully looking for little clauses to see where I'm potentially going to be screwed over.

6) Things to consider in relation to salary sacrifice arrangements
For a salary sacrifice to be effective for tax and National Insurance (NICs) purposes:

The potential future remuneration must be given up before it is treated as received for tax and NICs purposes; and

The true construction of the revised contractual arrangement between employer and employee must be that the employee is entitled to lower cash remuneration and a benefit in kind. For example the loan of a cycle and cyclists' safety equipment.

Does this mean that when my appraisal comes up in November, I will ineligible for any kind of salary increase or changes to my current remuneration package?

I'm expecting significant changes due to the nature of my job changing somewhat since my appraisal last year in that I'm being called out on a regular basis etc, so I want to implement call out charges etc...

If I go through with this agreement, am I screwing myself over for another year or am I getting the complete wrong end of the stick?

pdw

Not sure how you infer that from what's written.

The first clause appears to state that the money has to come out of your pre-tax pay.

The second clause is just requiring that there is a genuine reduction in your salary. I think it's to guard against you doing things like having a salary sacrifice of X and then immediately increasing your salary for the period of the sacrifice to offset the difference.

You have to make a sacrifice, but that doesn't stop your salary increasing during the period for other, independent reasons.

If you don't trust your employer, you might want to think twice about entering into the scheme, as the benefits are entirely dependent on them offering to sell you the bike at the end of the period for as low a price as HMRC allow, yet there is not, and cannot be, an up front commitment for them to sell it to you at all.

I can't see why an employer would try to screw you like that, but it does rely on an "understanding" rather than a written commitment.

portland_bill

It's nothing specific to my current employer, I've just had bad experiences before where employers have sold whatever to you and shown you the T&Cs later. Once bitten and all that...

I was honestly thinking the better of the clauses, I just wanted to double check.

Thanks!

spen666

As pdw says, there is nothing I can see in what you quote to support your fears.