Salary Scarifice

Dan:_4

I have a Salary Scarfice arrangement for my car. This payment comes directly from my Salary before tax/ni.

My gross Salary on my wage slips is £30,000.
My employer confims my salary as £30,000.
My P60 shows last years salary as £27,500 (minus the SS element)

Which salary do I use for a mortgage application? Gross or nominal?

monty-doggy

Normal. But then if asked about outgoings then declare your car.

Dan:_4

It's not an outgoing like child care or a credit agreement - It's a reduction in gross salary before tax and ni

amnblog

We had a similar enquiry a couple of weeks ago Dan.

You can't spend the car and it is not salary.

Dan:_4

amnblog wrote: »

We had a similar enquiry a couple of weeks ago Dan.

You can't spend the car and it is not salary.

So my official salary is £30,000. Should I use this or use £27,600 which according to my P60 was last years earnings?

vacheron

When we moved to a salary sacrifice scheme for our pensions a couple of years ago, this was voiced as a potential concern.

Our company agreed that our gross salary would always be stated to any agency who contacted the company for such reasons.

Therefore if I was in your position I would be putting down my gross (pre-sacrifice) amount because if they contacted my employer this the amount they would be told and the numbers would match.

It may be worth asking your employer what figure they would give if approached by a lender and using that.

amnblog

Dan: wrote: »

P60 was last years earnings

P60 figure is the earnings.

Dan:_4

vacheron wrote: »

When we moved to a salary sacrifice scheme for our pensions a couple of years ago, this was voiced as a potential concern.

Our company agreed that our gross salary would always be stated to any agency who contacted the company for such reasons.

Therefore if I was in your position I would be putting down my gross (pre-sacrifice) amount because if they contacted my employer this the amount they would be told and the numbers would match.

It may be worth asking your employer what figure they would give if approached by a lender and using that.

Thanks.

I have checked with HR and they would tell lenders my full gross salary (pre-sacrifice). Because my pension and car are both done through salary sacrifice it knocks a few grand from my P60 salary. However, my wage slips show the full gross salary.

All the literature published by our HR dept clearly states that the gross salary should be used for credit applications so I will do just that. If the lender picks up on my P60 I will have my payslips and if necessary a letter from my employer stating the full gross salary.

michaels

I was the one who asked a few weeks ago - in my case it is a pension sacrifice that I could reverse at any time if I wished but the consensus of the replies was that they would only count my post sacrifice income - however the company I work for only puts the post sacrifice income on the payslips as the payroll software does not support the pre sacrifice income being printed as well.

On a side note is it strictly legal for them to fund your car purchase in this way avoiding your tax and yours and theirs NI? I only ask as I might ask my employer to do the same in future now I have heard of it....

monty-doggy

The car can be stopped at any time. So your earnings are 30k. It's not like a reduction in salary at all.

Dan:_4

monty-doggy wrote: »

The car can be stopped at any time. So your earnings are 30k. It's not like a reduction in salary at all.

That's what I thought so thank you for confirming.