Salary Scarifice

Dan:_4

michaels wrote: »

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....

Pension payments, when deducted from salary in the normal way do not effect the mortgage - so salary sacrifice shouldn't either. (infact its better because your net pay is higher).

Regarding your side note - yes it is perfectly legal and something that is backed by the Governement. It is not a car purchase however, it is a 3 year lease but you do get the option to purchase the car at the end if you want. It also covers insurance, breakdown, servicing etc.

BristolBob

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.

If the car can be stopped "at any time" and the higher salary returned, then it is unlikely to be regarded as a benefit and will be chargeable as income, thus losing much of the purpose of the scheme. If you have sacrificed your salary then it is a variation of contract.

Dan:_4

BristolBob wrote: »

If the car can be stopped "at any time" and the higher salary returned, then it is unlikely to be regarded as a benefit and will be chargeable as income, thus losing much of the purpose of the scheme. If you have sacrificed your salary then it is a variation of contract.

You have to pay a fee, but it can be stopped.

amnblog

Salary sacrifice is effective when the contractural right to cash pay has been reduced.

gazter

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.

Your payslip will say otherwise though. When doing affordability its the net they look at.

Dan:_4

gazter wrote: »

Your payslip will say otherwise though. When doing affordability its the net they look at.

I spoke to Nationwide to clear this up and they will use gross salary not net.

horngkai

I can pay my nursery through salary sacrifice. Having played around with the mortgage affordability calculator, if I put my post sacrificed salary, I will be able to borrow less than if I put my normal gross salary and put the childcare cost in outgoing. Presumably this is due to the salary multiplier but in actual fact, because I pay the cost through salary sacrifice, I actually have more spending money. How would mortgage lender treat the childcare cost in this situation?

Kt8

we mentioned it in our application and it was evident in our payslips- salary sacrifice cars with NHS.

Woolwich were arsey about it and brought our affordability down,

Halifax and others werent bothered and go on gross salary - accepted with Halifax no bother.