Salary Sacrifice Car Scheme

dowd42

Hi all,

I'm thinking about using salary sacrifice to get a car on a PCP. Can I use it to fully pay my monthly instalments? Could anyone explain this calculator to me? Am I right in saying that if the car costs £1,284 a month, I would be paying that from my salary tax-free? I assume you still have to pay the deposit yourself, which I am prepared to do.

1. Full Salary 2. Reduced 3. Salary Change

Salary: 1.£5,000.00 2.£3,715.42 3.−£1,284.58
Income Tax on Salary: 1.−£1,116.92 2.−£603.08 3.+£513.84
Company Car Tax: 2.−£116.133. 3.−£116.13
NIC on Salary: 1.−£372.61 2.−£346.92 3.+£25.69
Net Pay: 1.£3,510.47 2.£2,649.29 3.−£861.18
Average Monthly Impact: 3.−£861.18

EDIT: Sorry about the layout. Hope you can understand it. Wont let me post links. 1. Matches up to 1. and so on.

Cheers,

A.Dowd

AlanP_2

Sorry but I can't help with your specific queries, but are you sure you can lease a car under Salary Sacrifice rules, and, if it is a company car surely they are leasing it (even though you may pay for it via salary deduction) not you so it wouldn't be a PCP?

GunJack

isnt £1200-odd A MONTH on a car a bit much? £1200 TO BUY A CAR, maybe, at a push. My last one cost me £100....

Wouldn't you be better saving or pension conts. for that much?

greenglide

It isnt PCP. Your employer leases the car and you pay for it via salary sacrifice.

However this makes it "a company car" so the standard company car tax is payable. You wouldnt do this for an old banger!

MoneyGeoff

£1,284 per month can't be right. Here's an example salary sacrifice calculation for an Audi:

Taxable List Price £14,475.00

Gross Salary Sacrificed = £321.42
Benefit in Kind (at Higher Rate of Tax) = £67.55
Net Monthly Cost = £253.97

The net cost via salary sac is usually more than just taking the money and doing a PCP yourself but you have to factor in that salary sac schemes include all maintenance, servicing, tyres, MOT, road fund licence, car insurance, breakdown cover, legal cover and also no deposit is required.

d70cw6

my mondeo BIK is something like £3,800 a year, £320 a month.
what car are you getting for £1,284 a month??

Thrugelmir

Don't over look the fact that your Employer is subject to Class 1a NIC on the benefit.