A question about salary sacrifice...
Discussion
I was pondering something today, and the thread on salary sacrifice pensions has reminded me.
My pension contributions are made via salary sacrifice, and I lease a car for my fiance via SS too.
What I pondered was, is there any specific reason preventing mortgage payments being made via salary sacrifice? As it's a large and regular expenditure for most of us the tax and NI savings could be significant. I can't be the first person to think this up, is it actually feasible or does something preclude it?
My pension contributions are made via salary sacrifice, and I lease a car for my fiance via SS too.
What I pondered was, is there any specific reason preventing mortgage payments being made via salary sacrifice? As it's a large and regular expenditure for most of us the tax and NI savings could be significant. I can't be the first person to think this up, is it actually feasible or does something preclude it?
Yeah, I would have thought HMRC would have some fairly tight rules about what you can and can't do via salary sacrifice. Paying into a company pension scheme - yes, paying for your company car - yes. Paying a personal mortgage that has nothing to do with your company - no.
Given that for most people the largest lump of their monthly salary goes on the mortgage can you imagine the loss of revenue to the government if that portion of your income wasn't taxed!
Given that for most people the largest lump of their monthly salary goes on the mortgage can you imagine the loss of revenue to the government if that portion of your income wasn't taxed!
Salary sacrifice can be done for anything. But remember you are sacrificing your salary in lieu of your employer making a payment or providing some other benefit. It works well for pensions as, generally speaking, payments into a pension scheme are not taxed.
If you salary sacrifice and a provided with a company car instead then that company car is a taxable benefit. It is the same for mortgage payments. The mortgage payments made by your employer are then taxable. In practice I don't see this working. Not only are you sacrificing salary for a taxable payment (which saves you no tax or NI) but I'm not sure the mortgage providers would agree for the liability to the mortgage payment resting with your employer.
If you salary sacrifice and a provided with a company car instead then that company car is a taxable benefit. It is the same for mortgage payments. The mortgage payments made by your employer are then taxable. In practice I don't see this working. Not only are you sacrificing salary for a taxable payment (which saves you no tax or NI) but I'm not sure the mortgage providers would agree for the liability to the mortgage payment resting with your employer.
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