What if an employee leaves early or is made redundant?
If an employee leaves before the end of the scheme, they must pay their employer any outstanding salary deductions from their final net salary, as compensation for non completion of the salary sacrifice. They may then have continued use of the equipment without further payment until the hire period expires, when they may be invited to purchase the equipment and become the owner. It is important that the employee is not deemed to be given the automatic right to own the equipment otherwise they would not be able to benefit from the tax exemption. Employees must therefore not be offered the equipment to purchase until the culmination of the hire term. In the case of redundancy, the balance of payments due on the equipment can be deducted from the employee’s redundancy settlement. The employer may of course choose to waive or reduce this amount.
