ParkingPlus Q & As

Will ParkingPlus affect my pension entitlement?
No. Pensions are calculated on an employee’s salary before any salary exchange scheme deductions.

Will the salary quoted in mortgage referrals or any other official letter be reduced?
No. The salary before any salary exchange scheme deductions are used in replying to these letters.

Will any employee be financially worse-off?
No.

How much will be saved?
The University will save approximately £80k and the staff with parking permits will save c£20k in total.

How can the employee benefit by the price of permits going up?ParkingPlus is a salary exchange scheme. This means that in return for agreeing to a reduction in their gross salary the employee will receive free parking. Parking is not a taxable benefit in kind and so, rather than paying for parking from taxed income, as is the case at the moment, the employee will agree to a reduced gross salary and pay nothing for parking. This means that there is no income tax or national insurance related to parking which gives savings for both the University and its staff.

What is a salary Exchange scheme?
With a salary exchange scheme, an employee agrees to ‘give’ an amount of money to the University before tax and national insurance contributions are calculated and in exchange the University gives the employee a non-cash benefit, for example, a parking permit. As a result, the employee will receive less taxable pay, and therefore they will pay less tax and National Insurance. The University will also pay reduced National Insurance employer’s contributions.

Why does the University get the majority of the benefit, couldn’t it be shared more evenly?
The University does not want to be seen to be encouraging car travel as this may have implications in the number of parking places that BANES allow us. The University recognises that car travel is currently the only practical means of travel for many employees and wants to ensure that the number of spaces is not reduced by any more than we are already committed to.

What will the University do with the savings?
The saving will be credited to the car park account, which is ring fenced, and will allow the University to continue to improve its car parks and to promote green transport issues including the continuing purchase of cycle shelters, locks for pedal cycles and signing of cycle paths and other similar initiatives.

What costs are there to the University?
There are additional administration costs for the University in running the scheme and a £10k charge will be made to the Car Park account to cover this. The £80k saving, referred to earlier, is after the deduction of this charge.

If the University and its staff both benefit where is the money coming from?
As the savings are in Income Tax and NI the Treasury will receive less tax revenue.

Is this a tax scam?
Salary exchange/sacrifice schemes are permitted by HMRC. It is the way some government policy is put into practice (e.g. childcare vouchers). Tax legislation applies to the University the same as with any other organisation, although the University does receive some benefits because of its charitable status. More details can be found on the HMRC website.

Is this part of a wider commercialisation of the University?
No, ParkingPlus is a tax saving scheme. The funding situation for all Universities is likely to get tougher in the coming years and the University is looking at ways in which it can save costs without affecting services.

Isn’t it unfair that higher paid employees save most?
ParkingPlus is a tax saving scheme. The savings are a function of both how much an individual pays for a parking permit and their marginal rate of income tax.

Doesn’t making the real cost of parking cheaper undermine the University’s environmental credibility?
The savings are minimal when compared to the cost of running a car and so are unlikely to influence an individual employee’s behaviour.

Will I be more likely to find a parking space?
ParkingPlus is not expected to alter the demand for parking permits and the number of spaces is not affected so the availability of parking places will be unchanged.

Will my Terms & Conditions of Employment change?
Yes, as you are participating in a salary exchange scheme there will be a small change to your Terms & Conditions of Employment.

Do I need to sign a new contract?
No, the launch letter is deemed to act as a notification of a change in your Terms & Conditions of Employment. The University is consulting all employees through two surgeries, a union meeting and a dedicated email address and telephone line. The consultation period runs until 19 October 2009, after which the University will review feedback received before finally deciding whether to adopt the scheme or not.

I am a low paid employee and do not pay PAYE, will I benefit from the scheme?
If your earnings at the University do not exceed your personal tax allowance, you will not benefit from the introduction of the scheme. The University has therefore determined a ‘pay protection limit’ of £7,500 and any employee earning below this sum will be exempted from car park charges and will not participate in this scheme. Should your earnings at the University subsequently exceed the ‘pay protection limit’, you will be automatically enrolled into the scheme from the start of the next car park permit year and your charge will be determined by the car park rates for that year.

I have a casual contract with the University and currently pay for my permit directly at the Car Park Office; can I participate in the scheme?
No, workers who have no contractual hours or are on a casual contract with the University should continue to pay for their car park permit at the Car Park Office.
Undergraduate students of the University, with some exceptions, are not allowed to bring their vehicles on to the campus, even if they are also a casual worker.

What happens if I go on maternity leave or long term sickness?
If you wish to continue to have a car park permit then you will remain in the scheme until such time that your salary reaches the ‘pay protection limit’, at which point you will be contacted directly and advised of your options.

Has the University consulted the trade unions about ParkingPlus?
Yes, the introduction of the scheme is being overseen by a Project Board, which includes representation from the unions. Additionally the University unions have invited the Project Board to participate in a meeting for union members.

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