Salary sacrifice/BIK confirmation

Griffin78

Hi,

I think I have calculated this correctly but would be good to obtain support/confirmation as this will impact me for the next 4 years.

I have recently moved into the higher rate income tax band and am considering buying a car via my company's salary sacrifice scheme. I'm aware this isn't the best timing due to the latest budget changes!

Lets say I earn £55K. I receive £10660 tax free. Using a couple of calculators online I pay approx £300 per month at the 40% tax rate. I currently have £200 deducted per month via salary sacrifice, nearly all of this into Pension.

I am looking at spending £300 - £350 per month on a car and only really considering those with cO2 of 75 or lower to make this worthwhile. The BIK cost of the car is let's say £128 per month.

So, I think this means I will pay an extra £128 per month in tax for the car but as I'm spending £315 - £340 per month out of my salary I will not be taxed the current approx £300 at the 40% rate?
I will also be paying £55 per month on childcare vouchers for the next year or so.
The minimum I'm going to be deducting my salary by is £355 including the childcare vouchers and car which should make my taxable pay go back into 20%?
If we take into account all of my deductions via salary sacrifice then the figure would be about £515 per month.

I believe the new rules state that if I purchase a car with higher omissions I will stay pay tax on the amount I am sacrificing/deducting from my salary for the car.

Any confirmation or anything I've missed would be appreciated!

DoaM

http://comcar.co.uk/taxtools/salarysacrifice/

Not tried it but their company car tool is pretty accurate so I see no reason why this won't be.

Griffin78

Thanks for the link. That site suggests that my car selection would incur just under £3K of company car tax for a full tax year.
The BIK info I have states that BIK tax is £128 per month.
Is the 'company car tax' this site lists in addition/different to the BIK tax I am expecting to pay?

bob_a_builder

Normally you would actually pay 40% (or 20% if not higher rate tax payer) of that 3K BIK value - so £100 a month

Griffin78

Got it, that makes sense now, thanks.