NHS Salary Sacrifice car scheme

Bebs

Hi

I wonder is someone can help, I have just recently enetered into the NHS Salary Sacrifice car scheme, I got a letter today from HMRC stating:

We understand that you now have a compnay car from your employer. You have to pay tax on the benefit of using a company car fro private motoring etc

Is a NHS salary sacrifice car classed as a company car?

Thanks

getmore4less

Quite probably in some way as you are using untaxed income to pay for it.


Did you not check this was a sensible thing to do with a full financial analysis before commiting.


here is one guide to the NHS scheme

https://www.cpcdrive.nhs.uk/?p=faq


What is the HMRC's view on SalarySacrifice4Cars?

HMRC view this arrangement as an employment law rather than a tax law matter, as employees are free to agree a change in their overall remuneration with their employer. HMRC will want to establish that a change in salary is "permanent" meaning that any change must be for a minimum 12 month period. In addition employees must also agree to sacrifice the salary before delivery of the car. Employees will be liable for Benefit In Kind Tax (BIK) as the scheme operates as a Company Car Scheme, however choosing a low CO₂ vehicle normally provides minimal BIK tax enabling tax savings under this scheme.
When reviewing the vehicles available through our online system you will easily be able to identify the vehicles with the most effective tax savings and lowest BIK

debsue

I had a NHS lease car and at one time my tax code was 6!! It is classed as a perk and taxed as such, despite you paying for it. Watch out at the end of the contract because if you are over your miles they will charge you and also charge for any scratches or damage. If you claim on the insurance ever the excess you pay is extortionate as well.

SueC_2

I'm no expert, but I would imagine so.

In very baisc terms, a salary sacrifice scheme means that you sacrifice some of your salary in order to receive some other benefit instead. If you didn't go for salary sacrifice you would be taxed on your entire salary, so I can't see any reason why you wouldn't be taxed on whatever benefit you choose instead of the sacrificed salary. The tax man isn't that easily avoided unfortunately!

salarysacrifice4cars

Hi Bebs,

If you have a car via salary sacrifice and are enjoying the tax and NI savings of paying for it from pre-taxed income via payroll reduction, then it will very likely be being provided by your employer as a company car.

If you can tell me which NHS Trust you are employed by it is highly likely that we are the lease company who provides the car to your employer and we would be very happy to talk you through the detail so you fully understand how it all works.

Although you are liable for BIK tax on the vehicle, this is more than offset by the tax and NI savings and on top of this you will be enjoying public sector discounts and corporate finance rates and fixed cost business insurance for the duration of the scheme, plus many other benefits.

We'd be delighted to explain in more detail if you would like to get in contact at livechat@ss4c.com and mention you were referred via this forum.

I hope you are enjoying your new car by the way?