CTW Salary Sacrifice and Universal Credits

later

Hello, I was wondering if anybody knew how the Cycle To Work salary sacrifice scheme affected universal credits?

I put in a message but they haven't got back to me in ages!

Thanks

MovingForwards

https://www.moneyadviceservice.org.uk/en/articles/salary-sacrifice-schemes

Have you chased them for a response.

calcotti

MovingForwards wrote: »

https://www.moneyadviceservice.org.uk/en/articles/salary-sacrifice-schemes

Have you chased them for a response.

Unfortunately this link has nothing to say about how salary sacrifice affects UC. I’ve looked through DWP Advice to Decision Makers and I haven’t spotted anything that covers this.

huckster

Universal Credit only acts on what data your employers supply to HMRC.

If your employers report your income with the CTW deduction already made, then UC would be none the wiser.

You should contact your employers payroll and speak to them. They should have full details of how they report such information.

The lack of response from UC, might be because they have no involvement in this, other than be the end user of the data your employers submit to HMRC.

later

Normally they'd respond though, even to say 'I don't know'. Phoning them takes forever and I'm deaf, and I don't like to do that anyway as when they reply on the journal thing, it's quotable.

Google is showing nothing specific to that, neither is HMRC. Payroll don't know how it works either, only that everything is deducted from the pay before tax.

calcotti

The most relevant paragraphs I can find in Advice to Decision Makers are

H3010 Calculating a person’s earned income for UC in respect of an assessment period should be based on the actual amounts received in that period.

Amounts excluded from being employed earnings
H3080 Generally, employed earnings include any amounts that HMRC regard as general earnings but certain amounts are excluded. These amounts are certain amounts that HMRC treat as earnings and certain amounts that are exempt from income tax.

Non-cash vouchers and credit tokens
H3115 Where a non-cash voucher or credit token is used by an employee to purchase an item which is exempt from taxation as employment income (for instance, workplace parking), then that voucher or token is also exempt.

This last paragraph is the most relevant. Cycle to Work salary sacrifice remains, to the best of my knowledge, exempt from both NI and income tax. Following the same principle as stated in paragraph H3115 I believe salary sacrifice for Cycle to Work should be exempt from being treated as earnings under UC.

hayleyiow

Hi there, I was just wondering whether anyone has an answer to this question? It sounds from the above that if I join the CTW scheme and my take home pay will be affected and therefore UC will assume I earn less and award me more in benefit? is this correct? The scheme feels too good to not do if that's the case! At my work we have the chance to buy additional holiday each year (which I did) and this also deducted and then reported to UC - so I don't think they are aware of this either?

later

hayleyiow said:

Hi there, I was just wondering whether anyone has an answer to this question? It sounds from the above that if I join the CTW scheme and my take home pay will be affected and therefore UC will assume I earn less and award me more in benefit? is this correct? The scheme feels too good to not do if that's the case! At my work we have the chance to buy additional holiday each year (which I did) and this also deducted and then reported to UC - so I don't think they are aware of this either?

No, it's the opposite.
You will take a smaller amount home from work, but UC will recognise it as a benefit in kind. Depending on the cost, it's unlikely to be much less UC.

Icequeen1

later said:

hayleyiow said:

Hi there, I was just wondering whether anyone has an answer to this question? It sounds from the above that if I join the CTW scheme and my take home pay will be affected and therefore UC will assume I earn less and award me more in benefit? is this correct? The scheme feels too good to not do if that's the case! At my work we have the chance to buy additional holiday each year (which I did) and this also deducted and then reported to UC - so I don't think they are aware of this either?

No, it's the opposite.
You will take a smaller amount home from work, but UC will recognise it as a benefit in kind. Depending on the cost, it's unlikely to be much less UC.

UC don't take benefits in kind into account presently. https://www.gov.uk/government/publications/universal-credit-and-employers-frequently-asked-questions/universal-credit-and-employers-frequently-asked-questions#how-does-universal-credit-work-with-benefits-in-kind