P11d, lease car and child benefit charge

matty2767

Hi guys

This is the first time I have had to do a self assessment.

My scenario is that 2015/16 i earned over £50k, we receive child benefit for 3 kids and so I have started to fill out my assessment.

I also have a personal lease car through work (which gets classed as a company car). I pay about £400 a month for the car via salary sacrifice and it is just add fuel, all maintenance is covered.

When I input the information off the p11d which is about £2900 cash benefit for the car, the breakdown calculation puts me as earning £55k which then says I owe £1400 back in child benefit charge.

Am I filling this out right? In one respect I can see that the car is a cash benefit but Then I am paying £3600 (before tax) a year for it. And there doesn't seem to be anywhere I can say this. My tax code has already been reduced for the BIK.

Could it be that my P11d is wrong? The amount made good is £0, should it be what I have paid for the car?

Can anyone put me straight please?

Thank you

Matt

Darksparkle

Your P60 should already reflect your salary sacrifice.

jimmo

As a higher rate taxpayer the sacrifice element should reduce your take home pay by (4800 less 40% tax 1920) £2880 so I am not sure where you got £3600.
The other side of the coin is that you have to pay tax on the car benefit charge. That’s the full amount of the charge because, for tax purposes you haven’t contributed to the car you sacrificed for it. So that is additional tax of £2900 at 40% = £1160.
In other words the cost to you of having £4800 worth of lease car to drive around in is (2880 + 1160) £4040.
　
That’s certainly tax efficient, a major selling point stressed by those who market the schemes but whether its good value for you is another question.
I’m not too familiar with the child benefit claw back but the principle is similar. Your taxable pay has been reduced by (4800- 2900) £1900 so I imagine the claw back is proportionately less than it would have been without the salary sacrifice.