NHS car lease salary sacrifice

ickleric2020

Hi I am after some advice regarding the NHS salary sacrifice car scheme, which basically gives people to chance to get a personal lease car with tax savings. I have been using this scheme for a few years now, they are usually either 2-3 years the leases. Each NHS trust seems to use different lease car companies.
On my contract for my current one says there’s an early termination fee which in year 1 is normally around 5x the monthly payment, then 3x for yr 2, the 1x for last year. I asked a few years ago if i could send my car back to replace it for a different one, they said fine. So i recently tried to do that so i ordered a new with the NHS lease company my trust uses and my car is with now, but they immediately cancelled it. I asked them why and they said you can't cancel a salary sacrifice contract during it unless you have had a Signiant lifestyle change like having a baby or getting divorced. They referred me to this HMRC page gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye , they said it was a HMRC rule and not theirs. I knew i would have had to pay the exit fee to change my car earlier but i didn't mind that.

I used to work at a different NHS trust who used a different lease company who i used for a couple of years, when there my colleague asked them if he could upgrade early to replace the car he had with them, they said yes as long as he paid the exit fees. So he did and no problems with getting it swapped he ordered it with no problems. I asked the NHS lease company from the other trust recently if they still allow this and whether they have the same rule as my current one with the HMRC rule and they said yes they still let you and don’t have that rule.

My query is why do they have this rule i appreciate the tax saving for the car scheme but it’s supposed to be a personal one so i should be able to replace my lease car at any time as long as i am willing to pay the exit fees which i am.
Also why is it the 2 different lease companies have different rules as i believe each trust can only use 1 company at a time so i can't choose the other one that does let you upgrade earlier? So i am very frustrated that i can't change my car earlier when i was hoping to especially when i was under the impression I would be able to.

Any advise or help would be appreciated.

FtbDreaming

I was under the impression that once you have the car its yours for the duration of the lease... otherwise people would be getting a brand new car every year a new plate comes out.

I work for the NHS and choose to run my own car as I have met many people unhappy in their job but stuck because of the car lease. And others who have had massive overpayments deducted and ended up with no wages.

ickleric2020

Hi I like the fact that we have full maintenance and tyres and serving so if any random problem happens like suddenly needing a set of tires costing a lot of money as I have had many of my own cars before but had sudden unknown costs like having to spend £500 for tires or £500 for a new clutch. So for me I like being able to have a new reliable car and not having to pay for anything else each month.
I don’t expect to upgrade every year for nothing as my contract says I have to pay a exit fee which I was happy to pay. As long as you know before hand what you will have to pay for the lease car should be no surprises.

Dazed_and_confused

Have to agree with FtbDreaming.

This crops up every now and again on here and the Cutting Tax board and a common theme is that people understand the salary sacrifice benefit but don't understand the tax part of it and seem surprised when they get the tax bill or reduced tax code arising from the company car benefit.

strawb_shortcake

The rules changed between my friend swapping cars on this scheme. She was significantly out of pocket due to the reduced tax benefit.
She was able to get out of her deal as she was TUPE'd, but it was difficult to get out of.