HOC 12/2008 Amendments to the flexible salary sacrifice scheme

This circular details the amendments made to the Flexible Benefit Salary Sacrifice Scheme for police officers. Details of the amendments are laid down in Police Negotiating Board (PNB) Circular 08/02, which is attached to HOC 12/2008.

The salary sacrifice scheme allows an officer to exchange part of their substantive salary (basic annual salary) for a form of non-cash benefit. Officers can voluntarily elect to convert part of their substantive salary into either one or both of the non-cash benefits.

The non-cash benefits are:

• Loans to purchase bicycles to travel to work.
• Childcare – The definition of childcare includes childcare vouchers, workplace nurseries or other employer provided childcare (defined as childcare where the employer engages with a commercial nursery or approved child carer to provide care for the children of employees).

Where a salary sacrifice is agreed the basic annual salary is reduced, rather than there being a regular monthly deduction from the gross substantive salary.

This will allow the sacrifice to be legitimate for HM Revenue and Customs purposes.

Occupational sick pay and statutory and occupational maternity pay will be calculated on the revised salary.

Once entered into, only in exceptional circumstances can an officer withdraw from the scheme before the expiry of the time for which it applies.

The PNB Circular states that Police Regulations and Determination and the Police Pension Regulations should be amended accordingly where necessary (however the advice in the PNB Circular is only advisory until approved by the Secretary of State for the Home Department).

The PNB Circular also states that:

• The Home Computing initiative has been withdrawn following section 61 of the Finance Act 2006, which omits section 320 of the Income Tax (Earnings and Pensions Act) 2003.
• Salary sacrifice schemes are subject to special legislation. Therefore, any advantages to an officer in respect of lower levels of national insurance or income tax cannot be guaranteed.

For more information see HOC 12/2008 at: http://www.knowledge network.gov.uk/HO/circular.nsf/79755433dd36a66980256d4f004d1514/f4a16687d455c8f58025746500370c9c?OpenDocument