Furlough and benefits in kind

tracysharp

I have been furloughed by employer from April 1st.
I currently get a gross salary of £2423.55.

i have a company car but this is via a salary sacrifice scheme and they are into paying 80% of the allowance - so am I technically finding 20% towards the company car?

i also have childcare vouchers deducted at £243 a month and this has been deducted from my salary, along with my normal pension contribution before my 80% wage is calculated? Then they are deducting the £243 to pay as childcare vouchers. 

all in all I am receiving £600 less in my nett pay and this is crippling me.

Is this all correct?

i am finding little advice on why salary  childcare vouchers Are deducted (no contribution by employer) before the furlough pay is calculated? 

Also my colleagues who have company vans and use for personal use, keep this benefit with not financial detriment.  But as the only option I had was to have a company vehicle through the salary sacrifice scheme, I only get 80% paid which leaves me funding 20%.

thanks 

[Deleted User]

Seems harsh with the childcare deductions? 

comeandgo

Your workmates using van for personal use are still taxed on this perk even though they can't really go anywhere with the van.

Grumpy_chap

There is guidance under "what to include when calculating wages" at the following link:
https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme#include
I have to agree that the phrase about salary sacrifice are not well written imo.

Regarding the fact you receive 80% of your car allowance but people with a van still get the full normal benefit, that is probably down to practicalities.  It is easy to deduct 20% from a cash allowance.  It is virtually impossible for the company to leave someone with only 80% of a van.

If you are currently receiving £2.4k gross, that is pretty near to the limit at £2.5k in any case under the furlough scheme, so any gains you might find would be small.

In terms of savings to compensate for the £600 less per month, have you considered where your outgoings could now be reduced:

• no commuting cost
• no work lunches / coffee
• no socialising cost / pub / family meals / days out
• no annual holiday to pay for
• no childcare costs (the £243 vouchers you are currently buying will off-set future child care costs)

If that still leaves you challenged financially, you could consider loan / mortgage payment holidays, though that helps cash flow but costs money in the long term.
One tool you could use is to do a statement of affairs (SoA) and see if that lets you identify solutions.  If it does not, share the SoA in the DFW forum for some ideas.

tracysharp

In answer to your questions; 

even though I am paying 20% towards my car (salary sacrifice)  I still get taxed on it as a company vehicle! So, I see it that I am worse off than my colleagues! I have raised with my employer but they have refused to comment. 
my work base was home, so all mileage was claimed for; 

 having a 3 year old we rarely went out and are spending more money on food as I use to be able to claim for food for lunch etc. when out on work visits.  So did my partner. We always too our own coffee (camping stove and cafetière!) 
we haven’t been able to afford holidays for the last three years. 

Days out have always consisted of elks and picnics. 

I have now stopped the childcare vouchers as my son will start school in September (but my furlough pay won’t change as it is calculated as at end Feb.  We have enough banked to last  the next 12 months, if we can indeed find a use for them at all) 

We have always lived on a tight budget. 🤷‍♀️ I always sell on unwanted items, such as toddler clothing and toys etc. Always think before buying anything, if it’s a need or a want. 

I just think that the discrepancy between my colleagues company vehicles and mine are unfair and as my employer pays no contributes to the childcare vouchers, my salary has been reduced. I wish we had opted for tax free childcare instead! 

We don’t have loans or credit cards only a mortgage and I’m reluctant to take payment holiday as it accuses more interest. 

I just wondered if anyone else has had the same issues and if it was all correct! 

tracysharp

I have read that Covid was a circumstance where you could change the salary sacrifice agreements - but for the purposes of calculating furlough pay then this had to be done before 19th March. As nursery was shut on 20th March, there is no way of predicting this prior. Don’t see why this can’t be extended to give people the chance to come out of the scheme. 

poppy12345

They can't please everyone. It doesn't matter how many times they did change rules, there will always some that will fall through the cracks. At least you're receiving some wages. There's so many people that haven't been furloughed at all.

Grumpy_chap

Thanks Tracy, I get that it is tough times and understand why the car thing (even though probably correct) seems unfair to you, but these rules were put together so quickly that there were bound to have been some apparent inconsistencies in how it all works.  The schemes that have materialised are generous, if not perfect.

I agree with your reluctance to take mortgage repayment holiday if you can possibly avoid it.

Still worth considering the SoA - you don't need to share it with anyone unless you want to.  It might reveal something that there could be a saving available or, if not, you will know you have done everything practical.

tracysharp

Thanks - I have already done a SOE. To be honest many many years ago I had to enter an IVA, which was paid off 20 years ago in full. I have lived frugally ever since, hence no loan, credit cards. Only utilities are essentials - no tv or music packages- nothing. I check my utility bills each year to make sure I’m getting the best deal and plan meals out each week - no food goes to waste! 

i appreciate the comment that some people had not been able to get furloughed but I didn’t come on here to get bashed or sound ungrateful. I had struggled to get any sound advice hence why I came here to see if anyone could help clarify some points. 

I shan’t be posting again! 

Grumpy_chap

Really!
I don't see that any of the comments were 'bashing' you - everything is either supportive or merely statement of fact.

poppy12345

I'm sorry that you haven't had the answers you would have liked. I don't see anyone bashing you, maybe i've missed those comments and you would like to point them out?