Wrong tax taken from wages

purpleparrotuk

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

Dazed_and_C0nfused

purpleparrotuk said:

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

You really have misunderstood this.

There are two separate aspects.

He now has a company car.  And tax will be due on the benefit in kind. If it's an electric vehicle then it's highly likely the figure (~£12k) is wrong and needs to be reduced.

Salary sacrifice does not impact that.  But it does mean he will have a much reduced amount of taxable earnings on which his tax code will be applied.

HMRC don't need to know separately about the salary sacrifice, it will already be reflected on his payslips.

You are running the risk of making things worse than they already are.

Penguin_

So normally on a purpleparrotuk said:

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

You need to understand how a salary sacrifice works.

With company cars you can pay towards some of the cost if you want a better car than your employer offers. This is then taken off the P11d value of the car.

Under Salary Sacrifice, your payments reduce your taxable income so you pay less tax & NI through your payslip. Your deduction isn't a contribution to the car.

purpleparrotuk

Dazed_and_C0nfused said:

purpleparrotuk said:

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

You really have misunderstood this.

There are two separate aspects.

He now has a company car.  And tax will be due on the benefit in kind. If it's an electric vehicle then it's highly likely the figure (~£12k) is wrong and needs to be reduced.

Salary sacrifice does not impact that.  But it does mean he will have a much reduced amount of taxable earnings on which his tax code will be applied.

HMRC don't need to know separately about the salary sacrifice, it will already be reflected on his payslips.

You are running the risk of making things worse than they already are.

In that case why is the salary sacrifice option on the gov site. It asks if you pay anything and the amount. If they don’t need to know that why is it there?

purpleparrotuk

Penguin_ said:

So normally on a purpleparrotuk said:

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

You need to understand how a salary sacrifice works.

With company cars you can pay towards some of the cost if you want a better car than your employer offers. This is then taken off the P11d value of the car.

Under Salary Sacrifice, your payments reduce your taxable income so you pay less tax & NI through your payslip. Your deduction isn't a contribution to the car.

It’s not a company car. His company are offering nothing. It’s just a company car for insurance purposes. 

Penguin_

purpleparrotuk said:

Penguin_ said:

So normally on a purpleparrotuk said:

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

You need to understand how a salary sacrifice works.

With company cars you can pay towards some of the cost if you want a better car than your employer offers. This is then taken off the P11d value of the car.

Under Salary Sacrifice, your payments reduce your taxable income so you pay less tax & NI through your payslip. Your deduction isn't a contribution to the car.

It’s not a company car. His company are offering nothing. It’s just a company car for insurance purposes. 

I didn't say it was a company car, I pointed out the difference between company car & salary sacrifice schemes.

purpleparrotuk

Penguin_ said:

So normally on a purpleparrotuk said:

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

You need to understand how a salary sacrifice works.

With company cars you can pay towards some of the cost if you want a better car than your employer offers. This is then taken off the P11d value of the car.

Under Salary Sacrifice, your payments reduce your taxable income so you pay less tax & NI through your payslip. Your deduction isn't a contribution to the car.

Here’s an example of what we are doing. 

Penguin_

I think they have the car set up wrongly on the payroll system, it is very important that the CO2 emissions figure is 0 if the car is fully electric.

Hoenir

purpleparrotuk said:

Penguin_ said:

So normally on a purpleparrotuk said:

Penguin_ said:

How do HMRC know that your husband has a car then?

There isn't a "salary sacrifice" option in payroll software when you report a car. You tick a box to say it's being payrolled which then means you pay the BIK tax in real time & it wouldn't be on a P11d.

The forms haven’t been filled in correctly. They need to know how much we are getting deducted for the scheme etc. There must be somewhere to enter this, otherwise how is any car salary sacrifice done 

You need to understand how a salary sacrifice works.

With company cars you can pay towards some of the cost if you want a better car than your employer offers. This is then taken off the P11d value of the car.

Under Salary Sacrifice, your payments reduce your taxable income so you pay less tax & NI through your payslip. Your deduction isn't a contribution to the car.

It’s not a company car. His company are offering nothing. It’s just a company car for insurance purposes. 

That must mean that the lease is in the Company's name. For all intents and purposes the Company is the hirer. 

"If salary is sacrificed in return for a company car you will pay Income Tax on either the amount of salary you sacrifice or the value of the car, whichever is the greater."

penners324

I think they've not filled in the Cash Equivalent section. So this is taking the e tire cars value bot the cash Equivalent value.