Employee Salary Sacrifice Car Scheme - how does it work?

bod1467

In my post "you" was intended to mean "total contributions" (personal plus company). Of course, lower salary = lower contributions to the pot. I don't think I said anything different?

In a DB scheme, accrued benefits are ring-fenced. Whilst it is possible for salary to go down, ring-fenced benefits do not.

It's a very complicated area - this is not the board for such a detailed discussion.

zagfles

Usually employers would have a "notional" or "reference" salary before any sacrifice, which they'd use for stuff like overtime, employer pension contributions etc.

But this isn't always the case so check your scheme.

Moto2

Isn't there also some rule that prevents you doing it if - after the salary sacrifice - the remaining salary is below the minimum wage?

zagfles

Moto2 wrote: »

Isn't there also some rule that prevents you doing it if - after the salary sacrifice - the remaining salary is below the minimum wage?

Yes.......

facade

I wouldn't touch any Government backed "scheme" that would "save" me money with someone else's bargepole

Salary sacrifice, cycle to work all the same, you won't ever beat "them"


But maybe I am too old and cynical nowadays

Shambler

If you do go ahead with it remember to tell HMRC.

I assumed my employer would do it but 2 years later found out that I should have had a cut to my tax code for them to reclaim the BIK...this was never explained.

Now I'm having to pay back 3 years of BIK in one year.

bogues

Hi
If your income is lower because of car salary saceifice can you then tell it to HMRC and be topped up by increased tax credits?

facade

bogues wrote: »

Hi
If your income is lower because of car salary saceifice can you then tell it to HMRC and be topped up by increased tax credits?

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl: