Lease Car that I pay for and tax?

Miss149

Hi All,


So since December 2013 I've been leasing a car through my work on a 'salary' sacrifice scheme.


I have a VW polo 1.2 diesel because I commute 80 miles a day.


I pay for this out of my own salary and my pay slip looks like this


Salary - £3145
Flex adj - £32.96 (I get the medical benefit paid back)
Total - £3177.96
Tax - £408
NI - £242.95
Parking - £10
Pension - £62.90
Car Salary Sacrifice - £418.44
Total - £1142.29


Net Pay - £2035.67


Now my tax code is 787L worked out because HMRC think I have a 'company' Car - now my question is - I don't have a company car - I pay for the lease myself so surely my standard tax code of 100L or whatever it is shouldn't be reduced because I pay for my own car?


Can anyone assist in this regard?


Cheers

Nicola_Ed

Hi - you do have to pay the same income tax as some one who is being provided with a company car.


Check the link below,


http://www.leaseplan.co.uk/how-it-works/4025/


You should be saving money by paying less tax on the car than you are saving by the amount you pay out of your salary for the salary sacrifice not being taxed.


So if you pay £75 per month less tax on your salary by having the salary sacrifice and pay £40 more income tax on the car benefit you are £35 per month better off.


It is confusing but this was hopefully explained to you when you joined the scheme.

jimmo

Nicola_Ed wrote: »

Hi - you do have to pay the same income tax as some one who is being provided with a company car.

Just to confirm that you don’t pay tax on the salary you have sacrificed but you do pay tax on the car benefit.
Your tax deductions will be something like:
　
Salary - £3145
Flex adj - £32.96 (I get the medical benefit paid back)
Total - £3177.96
Less:
Pension £62.90
Car Salary Sacrifice £418.44
Taxable earnings £2695.
Personal Allowance (7870/ 12) £655
Chargeable to Tax £2040
Tax due (2040 *20%) £408


So it looks about right.