Salary sacrifice to mitigate loss of personal allowance

PedroMatias

Hi all, 

This year, for the first time, I'm looking like creeping into the punitive £100-122k income band with the subsequent loss of my personal allowance. This results in an effective marginal tax rate of nearly 60% for that portion. 

I've heard whispers our company is going to be starting a salary sacrifice scheme for EV cars with the new 0% BIK incentive.

Does this mean I effectively see a 60% saving on the car lease payments, assuming the reduction in income occurs entirely within the 100-122k band? Seems too good to be true, what am I missing? 

Dazed_and_C0nfused

This year, for the first time, I'm looking like creeping into the punitive £100-122k income band

I've heard whispers 

Given it is now 7th February is this actually going to happen in the current tax year?

PedroMatias

Dazed_and_C0nfused said:

This year, for the first time, I'm looking like creeping into the punitive £100-122k income band

I've heard whispers 

Given it is now 7th February is this actually going to happen in the current tax year?

Sorry, I should have specified. It'll be for the next tax year, I believe the EV 0% BIK only starts in April . 

Dazed_and_C0nfused

I'm confused!  How will that help with the problem your post heading refers to

PedroMatias

I'll be in that band in the next tax year. I was looking ahead, my wording was poor! 

Dazed_and_C0nfused

There's an article about this on the This Is Money website (can't post links sorry).

PedroMatias

I'll have a search for it, cheers