Bike to work payments?

Ursula85

Hello,
Long time reader, first time poster
My SIL is currently on Maternity Benefit, she is not due back until end if march.
She is only receiving the basic benefit,none from her employer, so she isn't on payroll, not paying tax etc,
She has a bike on the Bike to Work scheme, her employer did not inform her that she would have to continue payments while on leave but now HR have been in contact with her via three different people that she works with, no letter or phone call, saying they want all the missing repayment and subsequent payments paid off by the end of December!
Does anyone know if they can do this?
It's meant to come out of her salary before tax, she isn't even being paid by her employer, she won't get the tax benefit from this either, plus she is on a reduced payment.
Bike to work just said to contact HR and discuss with them.
Any thoughts?

Nody

Same as if she had a company car during her maternity leave; it's a benefit that she has to pay for even if she has no salary to deduct it from.

Mrs OBumble

She needs to contact HR and find out what the real story is: 3rd hand versions via colleagues are useless. HR need to put their position in writing.

As Nody says, she is getting the benefit.

But surely Bike-to-work have policies to address this sort of situation?

tony81

Bike to work is a salary sacrifice arrangement. Therefore, the remaining balance of the bike (not already recovered through salary sacrifice) could potentially have been taken from her final salary. If she hasn't left the employer and is only on mat leave, well, it's a tough one. There's little reason HR can't resume the deductions when she returns to work (unless it's a rule of the scheme that it must be repaid within 12 months - or possibly just the agreement she signed with the company).

As for her not being eligible for the tax saving.. that's not necessarily true. Yes, low earners won't avail of such a large tax saving and this will apply to your SIL if she only worked part of the year, but that's not the employer's fault.

Ultimately though it does come down to your SIL who signed up for the scheme. She obviously chose to pay it in instalments through salary sacrifice but that was her decision.

The best thing she can do is call in to the HR department (ideally face-to-face but a phonecall may work just as good), asking to defer payment until she returns to work.

Failing that, if there is still a small tax saving to be made she could ask for a recalculated final payslip showing the complete deduction for the bike. Your SIL should then write a cheque to repay the difference between the original amount paid and the recalculated amount.