Salary Sacrifice EV

[CheesecakeRunner]

SWoll said:

james6546 said:

I'm also looking at this if I ever end up travelling for work again.

Ours is also with Tusker and I can get a Polestar 2 which works out at £564 a month (I'm not in the higher tax bracket so doesn't work out as well for me)

Thats 12500 miles a year with £900 paint and no other options. The dual motor one.

I am tempted as my company pays 45p a mile regardless

The 45p a mile thing is another benefit of SS I believe. If you're doing 10k business miles per year and doing all of your charging at home on a decent tariff you could be claiming back at least 40p per mile more than it's costing you, so £4k+ a year.

Purely depends on your company's expense policies. I have an SS EV through my employer (supplied by Arval). I have to pay BIK (1%) and only get business mileage at company car rate of 4ppm. My employer's policy is that if you have a car allowance, you get the company car rate whether you have an SS car or spent your allowance as cash on a car yourself, or if you have your own car already and just pocket the allowance. Although at least in the latter cases we can claim tax relief on the difference to the 45ppm rate. Employees who don't get an allowance are allowed to claim the 45ppm rate.

[oop north]

SWoll said:

The 45p a mile thing is another benefit of SS I believe. If you're doing 10k business miles per year and doing all of your charging at home on a decent tariff you could be claiming back at least 40p per mile more than it's costing you, so £4k+ a year.

In that case the car would be costing you < £250 a month, a no brainer I'd have thought?

Er, no. Salary sacrifice gives a company car, but payment of 45p per business miles only works on use of a personal car not company car. You would have to pay tax on difference between charging cost and 45p

[james6546]

SWoll said:

The 45p a mile thing is another benefit of SS I believe. If you're doing 10k business miles per year and doing all of your charging at home on a decent tariff you could be claiming back at least 40p per mile more than it's costing you, so £4k+ a year.

In that case the car would be costing you < £250 a month, a no brainer I'd have thought?

Yeah, at the moment I'm not doing any mileage, but assuming I'll be travelling more at some point it'd definitely make sense to. I saw a black Polestar 2 a few weeks ago and they look really good in the flesh.

Pre-covid I was spending £250 a month just on diesel so it'd be a lot better, especially when you factor in the depreciation on the car as I owned it. I think it was £4k year in depreciation.

I specced up a taycan cross on the site, but "the price was too high to quote for insurance purposes"!

[Timbo_S2]

oop north said:

Er, no. Salary sacrifice gives a company car, but payment of 45p per business miles only works on use of a personal car not company car. You would have to pay tax on difference between charging cost and 45p

It works on a personal car paid for with a cash allowance; isn;t this pretty much the same thing?

[Timbo_S2]

SWoll said:

Be interested in what that £800 a month gets you. If that's got to cover the cost of the lease + insurance + maintenance then i think a Taycan is going to be out of reach and you'll be looking at Model 3 SR+ or Polestar 2 RWD, but you never know.

I'd like to think I can get somthing smaller and cheaper, and pocket some of the allowance for the racing budget...

[james6546]

oop north said:

Er, no. Salary sacrifice gives a company car, but payment of 45p per business miles only works on use of a personal car not company car. You would have to pay tax on difference between charging cost and 45p

My company makes up the difference to 45p per mile. even after 10k.

Edited by james6546 on Wednesday 9th June 16:48

[SWoll]

oop north said:

SWoll said:

The 45p a mile thing is another benefit of SS I believe. If you're doing 10k business miles per year and doing all of your charging at home on a decent tariff you could be claiming back at least 40p per mile more than it's costing you, so £4k+ a year.

In that case the car would be costing you < £250 a month, a no brainer I'd have thought?

Er, no. Salary sacrifice gives a company car, but payment of 45p per business miles only works on use of a personal car not company car. You would have to pay tax on difference between charging cost and 45p

I read that in a previous PH thread, and must admit it did seem too good to be true.

4ppm for EV's is not great if you have to do a lot of public charging, but then the other savings more than make up for it I suppose.

[Andy_290]

Tophatron said:

You'd hope not but I guess there might be better prices if they're supplying bigger companies?

I'd certainly be interested to hear if anyone has prices for a 500e La Prima, or if there are any other particular good deals at the moment for other cars?

For me - 36m /10k

£308* Monthly net amount (Effect on take home salary)
Fiat 500e Hatch 3Dr 0.0Electric 42kWh 118 La Prima Auto
Amount taken from gross salary:£514
Income Tax saving:-£206
National Insurance saving:-£10
Benefit in Kind:+£10
Effect on net salary:£308

[Heres Johnny]

Timbo_S2 said:

oop north said:

Er, no. Salary sacrifice gives a company car, but payment of 45p per business miles only works on use of a personal car not company car. You would have to pay tax on difference between charging cost and 45p

It works on a personal car paid for with a cash allowance; isn;t this pretty much the same thing?

With salary sacrifice you're giving up pre tax income to pay for the car and all the expenses of running the car are offset against company profits and ultimately company taxation. Thats why you get 4p, HMRC feel they have give tax relief already on the capital costs of the car and running costs with the exception of direct fuel/electricity costs

If you took the cash allowance and paid income tax on it, then it would be paid for out of taxed income and be your car and not the companies and you could claim 45p.as the difference is meant to be a contribuition towards wear and tear etc.

Edited by Heres Johnny on Wednesday 9th June 17:23

[Tophatron]

Andy_290 said:

For me - 36m /10k

£308* Monthly net amount (Effect on take home salary)
Fiat 500e Hatch 3Dr 0.0Electric 42kWh 118 La Prima Auto
Amount taken from gross salary:£514
Income Tax saving:-£206
National Insurance saving:-£10
Benefit in Kind:+£10
Effect on net salary:£308

Thanks for looking this up!

I'd imagine that there will be particular cars that will look excellent value and they're likely to change month to month?

[Blue Oval84]

Heres Johnny said:

Timbo_S2 said:

oop north said:

Er, no. Salary sacrifice gives a company car, but payment of 45p per business miles only works on use of a personal car not company car. You would have to pay tax on difference between charging cost and 45p

It works on a personal car paid for with a cash allowance; isn;t this pretty much the same thing?

With salary sacrifice you're giving up pre tax income to pay for the car and all the expenses of running the car are offset against company profits and ultimately company taxation. Thats why you get 4p, HMRC feel they have give tax relief already on the capital costs of the car and running costs with the exception of direct fuel/electricity costs

If you took the cash allowance and paid income tax on it, then it would be paid for out of taxed income and be your car and not the companies and you could claim 45p.as the difference is meant to be a contribuition towards wear and tear etc.

Edited by Heres Johnny on Wednesday 9th June 17:23

Exactly, a SS car is a company car (that you pay for pre-tax), rather than a personal car. It's just a nice perk an employer can give someone who ordinarily wouldn't qualify for a company car.

A few people at my company have only found this out after leasing one, they do a few thousand business miles a year, and now those miles are going against their lease, and they're only claiming 4p a mile for the priviledge. Some of them are actually using hire cars and claiming the diesel receipt back as it's better value than rinsing the mileage limit on their SS "company car".

[SWoll]

Blue Oval84 said:

Exactly, a SS car is a company car (that you pay for pre-tax), rather than a personal car. It's just a nice perk an employer can give someone who ordinarily wouldn't qualify for a company car.

A few people at my company have only found this out after leasing one, they do a few thousand business miles a year, and now those miles are going against their lease, and they're only claiming 4p a mile for the priviledge. Some of them are actually using hire cars and claiming the diesel receipt back as it's better value than rinsing the mileage limit on their SS "company car".

I can imagine.

A good home tariff might cost you 4p a mile or less but add regular public charging and the punitive excess mileage charges and you'll be out of pocket very quickly.

Its another scheme where the more you earn the more you save also of course. As an example I put figures in for £120k salary to test the punitive tax threshold at £100k and chose the most expensive lease I could find.

£650 NET for a car costing £1500 a month..

Edited by SWoll on Wednesday 9th June 22:22

[Blue Oval84]

SWoll said:

Blue Oval84 said:

Exactly, a SS car is a company car (that you pay for pre-tax), rather than a personal car. It's just a nice perk an employer can give someone who ordinarily wouldn't qualify for a company car.

A few people at my company have only found this out after leasing one, they do a few thousand business miles a year, and now those miles are going against their lease, and they're only claiming 4p a mile for the priviledge. Some of them are actually using hire cars and claiming the diesel receipt back as it's better value than rinsing the mileage limit on their SS "company car".

I can imagine.

A good home tariff might cost you 4p a mile or less but add regular public charging and the punitive excess mileage charges and you'll be out of pocket very quickly.

Yep, that, and coupled with the fact that my SS quote is coming from standard rate tax (took me a little while to figure out why some more senior colleagues had a net payment a LOT less than I was being quoted!) means it will almost certainly never be a go-er for me.

Anything half decent (iPace,TM3, Etron, EQC, even the e-Niro) is literally coming out nearly as much as my mortgage. Really it only looks viable to me if I was the sort of person that always only bought new cars, and I just wanted a run about.

[oop north]

james6546 said:

oop north said:

Er, no. Salary sacrifice gives a company car, but payment of 45p per business miles only works on use of a personal car not company car. You would have to pay tax on difference between charging cost and 45p

My company makes up the difference to 45p per mile. even after 10k.

Edited by james6546 on Wednesday 9th June 16:48

That will mean the company is going to have to pay quite a lot of tax and employer’s national insurance on the excess over the approved mileage rate. If they are doing it properly

[LordFlathead]

Heres Johnny said:

If you do a lot of business miles, you might need to consider the HMRC approved reimbursement rate which is 4p a mile. if it was your own car you can claim up 45p a miles if thats what your employer pays, or the employer rate + tax savings on the dffierence to 45p. This and pension complexity tend to be the only 2 issues plus the fact you're probably locked into the car until the end of term. Some employers also have hefty penalties if you decide to leave.

This is interesting. Can you clarity this for me? I bought a Tesla Model 3 in December, £10k down of my own money and £570 a month. Company gives me £450 towards it and WAS paying me £0.45p a mile up until last month. Now they have renegaded on this and are paying me £0.04p as mentioned. So now I have lost around £500-£800 a month which is not small change.

My issues are these:

• 15,000 miles is around the time the tyres will need changing - it's a heavy car and 15000 x 0.04 = £600. Which is what a set of tyres costs for the Tesla. This is exactly what I would have been paid @4p per mile.
• As I am probably going to do around 30k miles for the first year, my end of PCP mileage will be around 60k after 4 years. I intend to buy the car and keep it. The extra deprecation is not covered by 4p a mile.
• Although servicing is minimal there will be a cost for brake pads or possibly discs during the 4 year term. Leasing has this included but I will cover any expenditure here. Either way 4p per mile covers virtually nothing.
• Although 4p might cover the "fuel" (HMRC does not recognise electricity as fuel), it does not cover any of the above.

It would seem that a lease would have been far more beneficial than a PCP, but I wanted to buy the car at the end of the term. The agreed final payment is £16.5k which means I should still be "in".. just.

Any suggestions on how to improve the current situation greatly received

[Terminator X]

sufcfan1 said:

Thanks, from the documents it looks like my pension is worked out pre deductions/sacrifice so all good on that point.

Just got a new role so trying to mitigate the 52% tax rate in currently sat in, got to love the Scottish tax system.

Such a high rate seems to be working out well for them then

TX.

[Heres Johnny]

LordFlathead said:

Heres Johnny said:

If you do a lot of business miles, you might need to consider the HMRC approved reimbursement rate which is 4p a mile. if it was your own car you can claim up 45p a miles if thats what your employer pays, or the employer rate + tax savings on the dffierence to 45p. This and pension complexity tend to be the only 2 issues plus the fact you're probably locked into the car until the end of term. Some employers also have hefty penalties if you decide to leave.

This is interesting. Can you clarity this for me? I bought a Tesla Model 3 in December, £10k down of my own money and £570 a month. Company gives me £450 towards it and WAS paying me £0.45p a mile up until last month. Now they have renegaded on this and are paying me £0.04p as mentioned. So now I have lost around £500-£800 a month which is not small change.

My issues are these:

• 15,000 miles is around the time the tyres will need changing - it's a heavy car and 15000 x 0.04 = £600. Which is what a set of tyres costs for the Tesla. This is exactly what I would have been paid @4p per mile.
• As I am probably going to do around 30k miles for the first year, my end of PCP mileage will be around 60k after 4 years. I intend to buy the car and keep it. The extra deprecation is not covered by 4p a mile.
• Although servicing is minimal there will be a cost for brake pads or possibly discs during the 4 year term. Leasing has this included but I will cover any expenditure here. Either way 4p per mile covers virtually nothing.
• Although 4p might cover the "fuel" (HMRC does not recognise electricity as fuel), it does not cover any of the above.

It would seem that a lease would have been far more beneficial than a PCP, but I wanted to buy the car at the end of the term. The agreed final payment is £16.5k which means I should still be "in".. just.

Any suggestions on how to improve the current situation greatly received

It sounds like it’s a private car (ie yours even if on a personal lease and not a company car). The money the company gives you could be after tax too, but because they’ve given you a car allowance, even though taxed, they feel that sum is the contribution to the running costs of the car. Because of that contribution they feel they only need to pay the company car rates. That’s how companies I’ve worked for see it.

If that’s the case, you can claim the tax back of the difference between 4p and 45p (first 10k miles, it then reduces), so you’ll get, depending on top tax rate you pay, as much as 40% of 41p or about 19p from hmrc as well as the 4p from your employer per mile.

[SWoll]

LordFlathead said:

• 15,000 miles is around the time the tyres will need changing - it's a heavy car and 15000 x 0.04 = £600. Which is what a set of tyres costs for the Tesla. This is exactly what I would have been paid @4p per mile.
• Although servicing is minimal there will be a cost for brake pads or possibly discs during the 4 year term. Leasing has this included but I will cover any expenditure here. Either way 4p per mile covers virtually nothing.

15k miles for tyres? We're at 12k now and doubt they are even half worn.

Assuming you are one pedal driving with max regen I'd be very surprised if you need discs or pads within 60k either?

[LordFlathead]

Heres Johnny said:

It sounds like it’s a private car (ie yours even if on a personal lease and not a company car). The money the company gives you could be after tax too, but because they’ve given you a car allowance, even though taxed, they feel that sum is the contribution to the running costs of the car. Because of that contribution they feel they only need to pay the company car rates. That’s how companies I’ve worked for see it.

If that’s the case, you can claim the tax back of the difference between 4p and 45p (first 10k miles, it then reduces), so you’ll get, depending on top tax rate you pay, as much as 40% of 41p or about 19p from hmrc as well as the 4p from your employer per mile.

That make more sense. The company initially offered this as they could not meet my initial salary requirements so offered this as a part salary (joined mid Covid). I have a meeting booked next week to discus this. Thanks for the reply I now have some inkling of how this works.

SWoll said:

15k miles for tyres? We're at 12k now and doubt they are even half worn.

Assuming you are one pedal driving with max regen I'd be very surprised if you need discs or pads within 60k either?

That's good to hear. I'm at 13k miles since end of December, so I called Tesla to ask what the average wear would be and when they recommended changing tyres. This was their recommendation but as we know an OEM will always over service not under. I asked these questions as a worst scenario.

[Tophatron]

SWoll said:

I can imagine.

A good home tariff might cost you 4p a mile or less but add regular public charging and the punitive excess mileage charges and you'll be out of pocket very quickly.

Its another scheme where the more you earn the more you save also of course. As an example I put figures in for £120k salary to test the punitive tax threshold at £100k and chose the most expensive lease I could find.

£650 NET for a car costing £1500 a month..

Edited by SWoll on Wednesday 9th June 22:22

Where did you find that calculator? I've been looking for a good one without success.