Car salary sacrifice and tax credits and hb

sianfrombrum

Hi all

I have just gone into a salary sacrifice scheme for a car. I current recieve child and working tax credits, and also receive around £30 a week housing benefit

£277 will be deducted from my gross salary every month. I wanted to see how this would affect my benefits as I have done a lot of research and can't really find a straight answer

Any help is much appreciated

Thank you

Nicola_Ed

I think your salary will be reduced for WTC but you will need to include the taxable benefit for having a company car. Perhaps best call them to confirm but it is confusing that you pay for a car yourself but also pay income tax but I assume this was explained to you?

CLAPTON

Why am I paying HB to some-one who can afford £277 per month for a car?

Carl31

Nicola_Ed wrote: »

I think your salary will be reduced for WTC but you will need to include the taxable benefit for having a company car. Perhaps best call them to confirm but it is confusing that you pay for a car yourself but also pay income tax but I assume this was explained to you?

its not a company car, its a purchase via salary sacrifice, and not a cheap one by the sounds

OP, surely it would be more beneficial to buy a cheaper car given your situation? you can often get deals for less than £100 a month

Nicola_Ed

Hi - I think there is a taxable benefit.


http://www.carbenefitsolutions.co.uk/company-car-salary-sacrifice.php


The employee gives up part of their salary to offset the cost to the employer of leasing and insuring the car and therefore they save the tax and NIC on that part of their salary. The employee has to pay tax on the company car benefit but for lower CO2 emission cars, which this structure suits, the tax is relatively low so the employee benefits from the difference between the tax and NIC they save on the salary foregone and the tax on the company car benefit.

xylophone

https://forums.moneysavingexpert.com/discussion/4636781

Discussed in above thread - you'll have to check with CTC/HB?