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Salary sacrifice EV scheme
Comments
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Your gross income for tax will be £28200.1
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Dental1983 said:Penguin_ said:Dental1983 said:Thanks for replies everyone !I’m just abit warey that the Ts & Cs say I’m liable for income tax is this the BIK tax ?
The HMRC calculator says the BIIK will be £169 for this year !Salary £33000
car value £42000
what I don’t want to happen is to be taxed on the whole £75k taking me into the 40% bracket !
Example:
Ford Explorer 125kW
P11D value £39,820
£674.24 Gross Salary deduction including ill health cover, tyres, servicing, maintenance, breakdown, accident management and insurance
-£303.41 Income tax saving at marginal rate of 45%
-£13.48 NI saving at marginal rate of 2%
£59.73 Company car tax payable
£417.08 per month
As others have said - read and understand when you are liable e.g. if you resign. On our scheme they can never charge you more than one month's salary but that's still a hell of a lot of money... like 15-16 months worth of payments!0 -
WellKnownSid said:Dental1983 said:Penguin_ said:Dental1983 said:Thanks for replies everyone !I’m just abit warey that the Ts & Cs say I’m liable for income tax is this the BIK tax ?
The HMRC calculator says the BIIK will be £169 for this year !Salary £33000
car value £42000
what I don’t want to happen is to be taxed on the whole £75k taking me into the 40% bracket !
Example:
Ford Explorer 125kW
P11D value £39,820
£674.24 Gross Salary deduction including ill health cover, tyres, servicing, maintenance, breakdown, accident management and insurance
-£303.41 Income tax saving at marginal rate of 45%
-£13.48 NI saving at marginal rate of 2%
£59.73 Company car tax payable
£417.08 per month
As others have said - read and understand when you are liable e.g. if you resign. On our scheme they can never charge you more than one month's salary but that's still a hell of a lot of money... like 15-16 months worth of payments!
I do have the breakdown and I’m happy with it ! I’m just cautious and I guess my main question was other than the BIK tax will there be any other tax implications that will sting me ?Gross £552
income tax. -£110
NI - £44
BIK tax £34
net cost - £4310 -
Unless your scheme includes it, you may need to buy an electric vehicle charger for your house.
Having said that, we have an EV under salary sacrifice, it's our second one now (4 year lease each time) and we love it - while it is more expensive than running a cheap runabout, it's worth it for the peace of mind that everything is covered, and I know how much I'm paying each month. It's also handy as we get business cover for myself and my husband included, which means we can use the car for work trips.0 -
LightFlare said:Penguin_ said:ButterCheese said:I'm sure you are already aware, but your drop in salary will also mean both yours and your employers pension contributions will drop. We were "sold" the idea of all these schemes in the NHS but when you look at it, it's quite an expensive way of doing it regarding reduction in both pay and pension
Surely thats better money saving than paying 3000 a year for something you will never own.....It's horses for courses, OP has already made their mind up and wants to lease a car. For some, the extra money is worth the extra piece of mind that you won't be lumbered with a potential eye watering repair bills if something goes wrong. Unlikely on a new car but it does happen.As an example, I bought mine at 8 years old for £5600. I have spent over £3000 in the last 3 years on clutch, flywheel, various sensors, suspension. Plus £240 for a full service every year. That brings my total to about £9500. I'm selling it now and will be lucky to get £3200. So it has cost me approx £175/month to own (without insurance and tax).OP can get a nice new car (which won't incur anywhere near the fuel costs that mine did) for just £225 more a month. If you have the money and want to drive a shiny new car then it's not really a lot more.0 -
Dental1983 said:WellKnownSid said:Dental1983 said:Penguin_ said:Dental1983 said:Thanks for replies everyone !I’m just abit warey that the Ts & Cs say I’m liable for income tax is this the BIK tax ?
The HMRC calculator says the BIIK will be £169 for this year !Salary £33000
car value £42000
what I don’t want to happen is to be taxed on the whole £75k taking me into the 40% bracket !
Example:
Ford Explorer 125kW
P11D value £39,820
£674.24 Gross Salary deduction including ill health cover, tyres, servicing, maintenance, breakdown, accident management and insurance
-£303.41 Income tax saving at marginal rate of 45%
-£13.48 NI saving at marginal rate of 2%
£59.73 Company car tax payable
£417.08 per month
As others have said - read and understand when you are liable e.g. if you resign. On our scheme they can never charge you more than one month's salary but that's still a hell of a lot of money... like 15-16 months worth of payments!0 -
ButterCheese said:I'm sure you are already aware, but your drop in salary will also mean both yours and your employers pension contributions will drop. We were "sold" the idea of all these schemes in the NHS but when you look at it, it's quite an expensive way of doing it regarding reduction in both pay and pensionRemember the saying: if it looks too good to be true it almost certainly is.1
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jimjames said:ButterCheese said:I'm sure you are already aware, but your drop in salary will also mean both yours and your employers pension contributions will drop. We were "sold" the idea of all these schemes in the NHS but when you look at it, it's quite an expensive way of doing it regarding reduction in both pay and pension
OP you should check but this is exactly what happens on salary sacrifice pension and car schemes where I work. Pension contributions are based on my gross salary before any salary sacrifice is accounted for.
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