Bankruptcy and salary sacrifice

Discodancer_2

Hi all I'm new to this site, I'm declaring myself bankrupt in December I work full time as a nurse in the nhs the trust I work at has recently started a salary sacrifice benefit to get a car. I'm worried that the OR may question this benefit. I need a car as I work until 11pm at night work weekends and on calls so I need a reliable car. Can anyone give any advice on this please. I went through a company called bankruptcy.co.uk who are completing the petition and statement of affairs for me, when I asked the person who is dealing with my case he wasn't too sure about salary sacrifice.
I am declaring bankruptcy as my husband left and I was unable to service the debts my husband has since returned but bankruptcy is the only option available to me.:):):j

PippaGirl_2

I do hope that you are not using a company that charges you for assistances with BR, there are many that do this for free. Pet hate of mine, companies that make money out of the vulnerable!

We'd have helped you with your SOA, as would CAB.

Sorry, no idea about the car scheme, debt info will probably know when hopefully they will see this soon.

Discodancer_2

Yes I wasted £400 on this company and their service was very disappointing.

JustinCredibleGillespie

Daylight robbery!

JCG

xx

alastairq

hi..as above re- paying a company to do what is really a simple but tedious task....but a task anyone on here...or at the Court, would be happy to assist with [not forgetting CAB?}

Re the car?

Is the scheme actually a [car] loan?

Or, is it a contract?

Or, Hire Purchase in disguise?


If it is a 'loan' to purchase, then the car really is your asset, and will be involved in your BR estate.

If it is a contract, with the actual owner being the contractor or NHS Trust, then the car itself won't be affected by the BR.

However, the issue may well be the cost to you.

And whether the OR will accept such cost within your SOA?

Or, even, a percentage of that cost [with the rest being found by you from within your SOA?]

A question you haven't yet asked is, what view does your employer take regarding Bankruptcy of a staff member?


Have you discovered what process you need to go through with your employer prior to petitioning BR?

PippaGirl_2

I was reading (aghast) a salary sacrifice scheme my council has as an option for its employees. It works like this.

An employee can choose a bicycle and safety equipment up to the value of £1000 including VAT which the council then purchaces and leases it back to the employee via a salary sacrifice agreement. The wages of the employee are reduced by £1000 for the whole year whic covers the cost of leasing the equipment.

At the end of that year the council may offer for sale the equipment to the employee at a fair market value as of that date otherwise it will be returned to the council for them to sell or dispose of. The salary of the employee would then return to it's higher rate.

Savings to the council, they save 9.1% on their NI contributions (12.8% if not in a pension scheme) these savings are then distributed into the councils funds for budgeting services.

I was shocked tbh, so the emplyee loses £1000 of salary over a year which in effect pays for the total cost of the bike and equipment and then at the end doesn't own a single penny of it?! Nice government money making!

It's the first time I have looked into salary sacrificing, and if others do similar things for cars it doesn't look like a very good deal, for the employee at least.

GazHatesBanks

PippaGirl wrote: »

I was reading (aghast) a salary sacrifice scheme my council has as an option for its employees. It works like this.

An employee can choose a bicycle and safety equipment up to the value of £1000 including VAT which the council then purchaces and leases it back to the employee via a salary sacrifice agreement. The wages of the employee are reduced by £1000 for the whole year whic covers the cost of leasing the equipment.

At the end of that year the council may offer for sale the equipment to the employee at a fair market value as of that date otherwise it will be returned to the council for them to sell or dispose of. The salary of the employee would then return to it's higher rate.

Savings to the council, they save 9.1% on their NI contributions (12.8% if not in a pension scheme) these savings are then distributed into the councils funds for budgeting services.

I was shocked tbh, so the emplyee loses £1000 of salary over a year which in effect pays for the total cost of the bike and equipment and then at the end doesn't own a single penny of it?! Nice government money making!

It's the first time I have looked into salary sacrificing, and if others do similar things for cars it doesn't look like a very good deal, for the employee at least.

The benefit for the employee is that no income tax (20%) and no NI (11.8%) is deducted. So the net cost of a £1000 purchase is actually £682 (plus the final payment at the end of the "lease"). This is because the amount of salary sacrificed comes off the gross income (rather than the nett).

notanewuser

The selling the bike to the employee at the end of the 12 months has been tightened up too - it now has to accurately reflect the market value if the bike, rather than the few quid they used to be bought for.

PippaGirl_2

GazHatesBanks wrote: »

The benefit for the employee is that no income tax (20%) and no NI (11.8%) is deducted. So the net cost of a £1000 purchase is actually £682 (plus the final payment at the end of the "lease"). This is because the amount of salary sacrificed comes off the gross income (rather than the nett).

Even so, they've paid £682 and got nothing to show for it.

Discodancer_2

alastairq wrote: »

hi..as above re- paying a company to do what is really a simple but tedious task....but a task anyone on here...or at the Court, would be happy to assist with [not forgetting CAB?}

Re the car?

Is the scheme actually a [car] loan?

Or, is it a contract?

Or, Hire Purchase in disguise?


If it is a 'loan' to purchase, then the car really is your asset, and will be involved in your BR estate.

If it is a contract, with the actual owner being the contractor or NHS Trust, then the car itself won't be affected by the BR.

However, the issue may well be the cost to you.

And whether the OR will accept such cost within your SOA?

Or, even, a percentage of that cost [with the rest being found by you from within your SOA?]

A question you haven't yet asked is, what view does your employer take regarding Bankruptcy of a staff member?


Have you discovered what process you need to go through with your employer prior to petitioning BR?[/QUOTE

The car is deemed a company car if you want to buy it at the end of the contract you have that option. As far as I'm aware there is no problem with nhs staff declaring bankruptcy there is nothing in our contract regarding bankruptcy.

alastairq

hi..if it's leased, then it isn't owned by the petitioner, then it isn't an asset-in-bankruptcy.

Re- the employer...? May be worth an enquiry to your HR department..which ought to be treated confidentially?