During these uncertain times we would like to clarify any questions around our salary sacrifice product Cycle to Work to ensure that our clients are well-informed.
Reward Gateway partners with the Halfords Cycle2Work team to run Cycle to Work, and we would therefore like to share a statement from them along with answers to some FAQs employers and employees may have.
Please read the below statement from Halfords around the measures they are taking to continue to work through the pandemic:
We here at Cycle2Work and the wider Halfords for Business team
As an essential retailer, we understand the vital part we play in the community ensuring that key workers are able to continue with their commuting and work responsibilities during the fight against COVID-19. Here at Halfords, we want to provide assurances that support is on hand, be it fixing a puncture on the cycle to work or carrying out essential bike maintenance.
All service and support from both Cycle2Work and Halfords for Business remains in place and is not affected by any changes, we have a commitment to keep Britain moving and are here to support you every step of the way.
For the most up to date information from Halfords, please check their website: https://www.cycle2work.info/latest-updates
How do we manage Cycle to Work for employees on furlough?
The latest guidance from HMRC states that when employers calculate 80% of their employees’ wages, they should not include “non-monetary benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay.”
It also says:
"The entirety of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.
Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.
Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly."
This guidance means that salary sacrifice cannot be taken from the pay an employee receives through the furlough grant.
What happens to deductions during this time?
Running a salary sacrifice scheme and recouping the funds is always at the employer's discretion and the same rules still apply. If an employer wishes to pause deductions for an employee, they can do so.
If an employee is at risk of falling below National Minimum Wage due to a deduction, then deductions should be paused.
If an employer decides to pause deductions, they can be reflected in SmartPay too. Simply go to Application List > Select Employee > View Details > Manage Deductions > Update amount and instalments. Read more: Updating, pausing or reducing salary sacrifice payments in SmartPay™
If an employee is a leaver, the employer can deduct any remaining balance from their final pay.
Halfords and the Cycle to Work Alliance continue to seek further guidance from the Department for Transport during the Covid-19 crisis. We will share any updates if received.
Neither Halfords or Reward Gateway are tax advisors and employers should seek further guidance if they are unsure.
Can I still apply for Cycle to Work?
An employee should still be able to apply if there is an open application window – even if they are currently off work or working from home. Applications are still approved by employers, so approval times may vary.
Can I use my CtW bike to travel to buy essentials or to get my one form of daily
Yes, employees are allowed to use their bike for recreational use as long as this is still allowed by the UK government. Employees should, of course, follow NHS advice and take the necessary precautions.
Can I redeem my bike online from Halfords or Tredz?
It is highly recommended that Letters of Collection online at www.tredz.co.uk with free UK home delivery. Simply enter the LoC number at checkout.
Unfortunately, online redemption is not currently available on www.halfords.com.
Can I still redeem my bike in-store at Halfords or Tredz?
For the most up to date information on Halfords Group stores, please go to the appropriate website:
Can I still redeem my bike at an independent bike retailer?
This is possible if the local bike shop is still open for business during this time. Please contact the chosen store directly to confirm they are open and can redeem a Letter of Collection.
What happens if my LoC expires?
Letters of Collection are valid for four months. If it does expire, please contact the Halfords Cycle to Work team on 0345 504 6444.