Salary sacrifice - URGENT scared and unsure - are YOU aware?

Mikee123

Honeynut, thank you for the links to previous cases - I have taken a lot from that and as such will be using these as reference. Although some of the cases mentioned did not go in favour of the appellant - the recommendations etc by the Judge do highlight a number of additional factors to be considered.

This is a very grey area with these lease payments.
CSA have confirmed this cannot be accepted as a "company car" since the terms and conditions state it cannot be used for business use of any kind.
It does not come under pension either since it isnt a pension

...therefore although it is a HMRC approved salary sacrifice scheme it has 2 elements. The first being the tax reduction under salary sacrifice resulting in - lower contributions of tax and ni and a lower lease payment, the second being Benefit in kind

Beggars belief!

Mikee123

This is the point though James... This isn't a pension.


This is not a pension yet is being removed from income as if it were a pension.

This makes net wage substantially lower - yet this is NOT for a pension.

You see James the reason I struggle to accept this as an acceptable deduction is this...


Would you as a PWC be happy?


Do you see where I am coming from?

Mikee123

Honeynut could you explain this to me please. Reading the link you provided concerning the case

"Calculation of income – expenses “wholly, exclusively and necessarily incurred in the performance of the duties of the employment” – car allowance paid by employer – whether apportionable between business and personal use"



So am i to believe from the case in the link you have provided it looks like there may be a chance that this is in fact an error to deduct these payments before maintenance is calculated? or am I missing something important when interpreting the case?

jamesd

Mikee123 wrote: »

CSA have confirmed this cannot be accepted as a "company car" since the terms and conditions state it cannot be used for business use of any kind.

It clearly is a company car and it's nonsense for the CSA to suggest that it is not. HMRC is governing on this and here is what HMRC says about what is a company car:

There is a tax charge where, because of their employment, a car is made available to and is available for private use by a director or an employee earning £8,500 a year or more, or to a member of their family or household (a ‘company car’).

That's true however much business use there is, from none to all. What the CSA should be saying is that it is a company car with no work usage so no allowed deduction. That is correct - not making the false claim that a company car is not a company car - and also should produce the correct payment result.

Otherwise what can happen is him tying them up in knots by the easy expedient of proving that it is a company car just by showing what HMRC says is a company car.

Mikee123 wrote: »

...therefore although it is a HMRC approved salary sacrifice scheme it has 2 elements. The first being the tax reduction under salary sacrifice resulting in - lower contributions of tax and ni and a lower lease payment, the second being Benefit in kind - reducing the tax code by nearly £2000 per car.

Yes, both of those are parts of the cost and I don't see any logical reason why they should be allowed as deductions from income for CSA calculations given the complete lack of business use.

I don't think a car is necessarily a luxury, they can be required even when not used for business purposes, for things like getting to and from work. But in your specific situation I think he's just playing fast and loose with the rules and trying to dodge, and I don't think it's reasonable for him to be allowed to get away with that.

I mentioned my pension levels just to give you some idea of what might be reasonable for someone not trying to dodge the CSA. Just so you can get some idea of how reasonable his pension part might be, or not. Since he does seem to be trying to play the rules to avoid the appropriate payment amount.

Mikee123

I cannot say thank you enough to you both for helping me so much with this situation.
I have struggled so much to maintain a good standard of living for our children and in the meantime between working and raising our children I have made myself ill tying myself up in knots disputing this case
I convinced myself I was crazy because no-one seemed to know where I was coming from regarding these vehicles and at the same time was sure I was the sane one for seeing the deductions - before csa calculations - as being unlawful.


I cannot express my appreciation enough for your guidance
:happyhear

jamesd

You're not crazy, he just seems to have got better advice in divorce and this so far. No reason you have to let that continue.