Salary sacrifice car

AndyA1963

I hope I have posted this in the correct place .
In 2016 I undertook a salary sacrifice scheme for an "eco" car under the Royal Mail's " my benefit" scheme.
I was led to believe that this was a cost effective way of driving a new car .  I pay £60 a week
out of my wages and all I have to do is put fuel in the car .  However each year I receive a tax bill
from HMRC ,which is unexpected , and my code for 20\21 is 553L which is substantially less than 1250.
I have spoken to the tax office who were helpful however they told me to take this up with Royal Mail's
HR who were not helpful at all and simply said that I am responsible for this tax payment. My union have
been disappointing regarding this also.  Is there anyone here who can offer my some help or advice please ?

marlot

It is normal to have a 'benefit in kind' tax charge.  This has applied to each company car I've had.
Are you sure it wasn't highlighted in the forms/documentation you signed?

AndyA1963

marlot said:

It is normal to have a 'benefit in kind' tax charge.  This has applied to each company car I've had.
Are you sure it wasn't highlighted in the forms/documentation you signed?

Thanks for this . So even tho I am paying to lease the car I am still liable to pay the BIK tax  if the car
was simply given to me to use by my employer ?. 

Dox

Prior to 2017 a salary sacrifice car scheme carried the same tax advantages as other salary sacrifice schemes however, since April 2017 the employee is now required to pay income tax on either the value of the car or the amount of salary sacrificed. Any salary sacrifice car agreement which precedes the change in tax rules remains exempt from income tax until 2021. Source: https://www.rac.co.uk/business/news-advice/what-is-a-salary-sacrifice-scheme

It looks a bit odd that you are being taxed when you say you started this arrangement in 2016. Worth having a word with your payroll department and asking what has been reported to HMRC about the start date of the arrangement.

ReadingTim

"Cost effective" here means cheaper - it's a cheaper way of driving a new car.  It does not mean free, which is what you may have thought.  Sorry if this isn't what you want to hear.  

AndyA1963

ReadingTim said:

"Cost effective" here means cheaper - it's a cheaper way of driving a new car.  It does not mean free, which is what you may have thought.  Sorry if this isn't what you want to hear.  

I was aware it wasn't a free car , lol!. However I was paying £60 a week to lease plus paying tax as if it were 
a car given to me . I have since found out that as I had taken out the scheme prior to April 2017 I should not
have been paying any car benefit . The matter is now in the hands of my union who are dealing with HR for me .