Car salary sacrifice

richard2622

I’m currently salary just under £90k per year but with overtime and bonus I’m regularly hitting £130k+ per year. My employer has recently started a salary sacrifice scheme for cars. I have seen a vehicle I’m interested in and have an online quote but the price seems different to what I’ve worked it out using a salary calculator. Online using the car provider it quotes £983 monthly net amount. But as stated using an online salary calculator and putting in the figures for salary sacrifice it works out considerably cheaper. Is there a way to calculate what the true figure every month will be or is this not possible as the extra wage is bonus/overtime related?  

El_Torro

If you can find a way to keep your earnings below £100k per year this will help as the tax you pay between £100k and £130k is quite punishing. One way to reduce your earnings is to lease a car through salary sacrifice, another way is to pay into your pension, ideally through salary sacrifice.

i don’t think it’s easy to calculate exactly what you’ll pay, due to variable earnings. You should get at least 40% tax relief though, since your basic salary is about £90k. 

Are you sure you are comparing like for like? £983 per month for a lease sounds very expensive, especially if it’s net. I wouldn’t expect even a Tesla to cost that much. 

richard2622

It’s a BMW X5 50e that I’m looking at. The monthly gross is £1231 according to tuskers website. 

MyRealNameToo

richard2622 said:

It’s a BMW X5 50e that I’m looking at. The monthly gross is £1231 according to tuskers website. 

Do you know the lease cost? 

The reality is, "it depends". How does your scheme work and what you may be losing in pension and bonus if these are calculated pre or post sacrifice 

sheramber

You will lose X amount of salary to cover the lease payment.

You will have a benefit in kind charge to tax depending on the type and value of the car

The charge would  be 9% for 25/26, 10% for 26/27, 11% for 27/28.

The BIK  is charged at  your taxable rate. 

MyRealNameToo

sheramber said:

The charge would  be 9% for 25/26, 10% for 26/27, 11% for 27/28.

The BIK  is charged at  your taxable rate. 

Percentage is applied to the official list price of the vehicle including any optional extras not the price it's actually gotten for.