Why has my Employer set up the Technology Benefit scheme?
The scheme is designed to make up-to-date computing equipment available to staff for personal use. We are keen to see all staff develop their IT skills.
Who is EmployeeChoice?
We are operating this programme in partnership with EmployeeChoice, who have an excellent track record of operating similar programmes with a wide range of other organisations, across the private sector, education, local government and health. They will source the products from the suppliers, negotiate the best price deals, and take the orders via this online web portal which they have tailored for us as part of your benefits package.
How does the Benefit Scheme work?
The scheme makes technology products available to the employee for their own use. The equipment is provided for personal use. Your employer will own the equipment, but charges you for the use of the equipment. At the end of the benefit period, you will be given the option to keep the equipment, or end the agreement and have it collected. All payments will be made through your pre-tax (gross) pay, and will be on a “Salary Sacrifice” basis.
Example of Tax Savings for a Computer on a 24 month Scheme
Based on the following rates:
• Standard rate Taxpayer Income Tax - 20%, NI - 12%
• Higher Rate Taxpayer: Income Tax - 40%, NI - 2%
1. You choose a £600 computer package
2. Your Gross Salary will be reduced by £25 per month for 24 months via Salary Sacrifice.
3. A salary sacrifice can allow you to make savings on Income Tax & National Insurance (NI) and you should see the effect of this on your payslip.
Whilst the salary sacrifice will be processed free of income tax on your payslip there will be an income tax charge every year on a small proportion of the cost of the computer equipment (does not apply to phones). This charge will be declared on your annual P11D by your employer in the same way as other benefits. This will change your tax code slightly for the next tax year.
The charge is calculated on 20% of the computer’s value each year during the scheme. So for a £600 computer the tax at standard rate will be charged on £120.00 per annum which works out to be £24.00 per year. Over the two years you will pay £48.00 standard rate income tax in total, compared with £120.00 (20% of £600) if you had been paid normally and made a purchase on the high street.
If you return the computer equipment at the end of the scheme there will be nothing further to pay. However if you opt to keep the computer there will be one further tax charge which will be managed by your employer on your P11D, for the outstanding residual income tax (in the example this would be £72.00). Therefore if you keep the product(s) you will only save National Insurace.
What is “Salary Sacrifice”?
Salary sacrifice means you agree to exchange a portion of your gross salary for the equipment. Your gross salary is then adjusted each month to match the payment required for the goods over an agreed time period. As the monthly repayment cost is deducted directly from your gross salary – before you pay tax and National Insurance - this should lead to savings compared with paying for the same goods from your net pay. Again, see the worked financial examples to see how this works.
What happens at the end of the scheme?
You have a choice to retain the equipment as yours or return it to your employer – EmployeeChoice will contact you approximately 8 weeks from the end of the scheme to determine your decision. If you wish to keep the equipment at the end of the period, then you do not have to take action – if you wish to keep the equipment, the tax due (as explained above) will automatically be deducted as an amendment to your tax code or a similar process but will not include a cash payment.
If you do not wish to keep the equipment at the end of the period, then you must confirm with us before the end of the agreement to confirm this, and then follow instructions regarding collection of the goods.
Should you choose to retain the equipment, we only ask that when you do come to dispose of it, that you do so legally by taking the equipment to your local recycling centre.
Am I eligible to take part in this programme?
This benefit is open to all staff that meet the eligibility criteria:
• You must be an employee of the organisation running this scheme
• You must have a contract of employment with extends beyond the projected end of the payment period for the equipment
• You must be at least 18 years old
• You must be earning in excess of the minimal wage, after the monthly payment is deducted from your gross salary
• Approval decisions made upon affordability
What equipment can I have?
The full list of available equipment is made available to review on the online website once the order period begins. See product categories to review the range.
How much will the products cost me?
The cost of each product is set out in the online website. You will see the full cost of the item, the monthly deductions that would be made to your gross salary, and an estimate of the likely additional saving you would make on Tax & National Insurance as a result of the use of salary exchange. We also provide a close estimate of how much your take home pay will change in exchange for the equipment.
When and where can I order my equipment?
Equipment can be ordered during the order period as specified by your employer – See the order window dates on the store home page. Orders can be placed on the online portal in the same way as shopping on a retail website. However, no payment is required upfront for your order.
Is there a limit on how much I can spend?
Yes. The maximum order value for this scheme is £2,000.
Can I change the specifications of the products on offer?
No, the specification for each product is fixed. We cannot add to the product catalogue once the scheme is live.
Can I order more than one product through the programme?
Yes, you can order more than one item up to the order limit.
Will this programme be offered again?
This will depend upon how popular and successful the programme is but most organisations provide the scheme at least once per year.
Can I change my mind once I have signed the agreement?
Yes, on signing you will have a 14 day cooling off period in which you can withdraw from the programme. You will need to notify EmployeeChoice by email of your decision to withdraw– firstname.lastname@example.org. After the cooling off period, you will no longer be able to change your mind and will be committed for the full agreement period.
When will my product be delivered?
When the order period has closed, Your Employer will check your eligibility for the programme. If your order is approved, then the goods will be released for delivery. Arrangements will be made directly with you by EmployeeChoice to confirm delivery. Delivery of your items will normally be between two to three weeks after the 14 day cooling off period.
Can I have the product(s) delivered to my workplace?
No, to ensure proof of receipt we need to deliver to your home. Please ensure you give the right email and phone details including mobile phone - to EmployeeChoice via the online website so that they can contact you and deliver to your home. Without correct information, your delivery may be delayed. EmployeeChoice will not use your personal information for any other purpose.
What should I do when the products are delivered?
The delivery will be made by the courier between the hours of 9am to 5.30pm and requires a signature.
If a delivery is attempted and no one is available at the address, a card will be left and the parcel will be held at a local depot. It will be your responsibility to rearrange the delivery. You will have 5 days to do this before your order is returned to base.
If the product packaging is damaged please ensure that this is noted on the carrier’s delivery note as “damaged packaging”; or if in doubt reject the delivery. If you do have an issue, you should contact EmployeeChoice direct, via email@example.com or via 01992 663999
Can I load my own software or upgrade my computer products?
You can load any additional licensed software onto the computer or any new hardware throughout the agreement period. Support for the software and hardware must be provided by the supplier of the item added.
Will the Internet Security software supplied with my machine be the latest version?
Yes, but as with all anti-virus software you will need to download updates to protect against the latest viruses. If you choose not to download updates, the software will continue to function but you will not be protected against the latest viruses.
Why would I want Internet Security software with a Mac?
Whilst Apple technology differs from other home computing technology in regard to security, Apple computers can still become infected.
What is the repayment period?
The repayment period on this scheme is 24 Months.
What if one of my products stops working?
Specific warranty arrangements vary between different manufacturers but most products as standard come with a 1 year warranty – manufacturer’s warranty will be outlined as part of the specifications set out in the online website. However, you should always register your product online with the manufacturer when you first get it. Many computers have a programme in them which asks you to do so this. Please do follow the instructions – it might take a minute or two but it can save you a lot of time should there ever be a problem in the future. If you have a problem with equipment failure under warranty, please contact the manufacturer as per the warranty arrangements. You can contract EmployeeChoice, either via the online website or the call centre, for help if you need it. Do not contact your employer, they will not be providing IT support for these items. If extended warranty was part of the product bundle you purchased please follow the instructions provided when the warranty documentation was sent out.
My employment is due to cease before the end of the agreement period, can I still participate?
No. If your current contract of employment does not cover the whole of the repayment period, your order cannot be accepted.
What happens if my employment ends for whatever reason?
If you leave your post for whatever reason, the agreement will also terminate. The terms and conditions of the agreement mean that you agree to your employer taking any outstanding amounts that you would have paid from your net final salary payment. Any additional payments made on early termination will come from your net salary, and therefore you will not benefit from the tax and National Insurance savings that would have been available had the arrangement continued as originally planned.
What is the insurance offer all about?
The care of the equipment is your responsibility. Normally home contents insurance can cover accidental damage, loss, fire and theft but it is likely there will be an excess on your policy. With that in mind we include on the website an offer for insurance cover which carries no excess for the technology products. The documents on the website will describe the policy and the terms and conditions. The safety and care of the equipment is down to you during the agreement period.
What happens if my salary reduces and no longer covers the payments – through long term sickness, or maternity leave for example?
You can retain the goods and continue using them. Where there is insufficient salary for you to make a payment (e.g. when you enter the unpaid period of your maternity leave), then your payments will be suspended and recommenced on your return to work. Where payments are suspended, deductions will recommence at the end of the unpaid leave period. In short, your payment period will be extended to make good the payments you missed.
Does this offer make a difference to any other benefits?
The payments are based on a salary exchange arrangement, so can affect other entitlements under your contract of employment. If unsure please email firstname.lastname@example.org
What about maternity leave?
Maternity Pay will continue to be based on your salary prior to your payments, so will be unaffected for the period of your Maternity Leave. The same principles apply to Adoption and Paternity Leave.
What about sick leave?
Sick pay will continue to be based on your salary prior to your payments, so will be unaffected.
What if I am claiming Working Tax Credits?
Entitlement to Working Tax Credits will depend on your individual household circumstances. If you choose to participate in the Computer programme, the impact on your entitlement to Tax Credits may be positive. For more information please contact HM Revenue & Customs (HMRC) helpline on 0845 300 3900 or refer to HMRC’s tax credit calculator website http://www.hmrc.gov.uk/calcs/ccin.htm.