company car 'trade up'

[jonah35]

hi guys

we all know that some firms have a 'trade up' so you can pay to trade up from say the boring but free golf bluemotion to a more exciting car - let's say a merc 350 CDI

now they often have 'trade up' amounts in the company car scheme whereby say you have to pay £150 per month extra through your paypacket for the better car.

does this come off your gross salary or net?

cheers

[LC23]

jonah35 said:

hi guys

we all know that some firms have a 'trade up' so you can pay to trade up from say the boring but free golf bluemotion to a more exciting car - let's say a merc 350 CDI

now they often have 'trade up' amounts in the company car scheme whereby say you have to pay £150 per month extra through your paypacket for the better car.

does this come off your gross salary or net?

cheers

Usually net.

[jonah35]

LC23 said:

Usually net.

hmm, ok, bad news for a 40% taxpayer then in theory.

I was thinking a £300 trade up off gross would equate to £180 net which wouldn't be so bad!

[VeeFour]

My previous employers did it as some kind of salary sacrifice so it was coming off your gross.

Also remember your contributions are taken into account for BIK calculation purposes.

[jonah35]

VeeFour said:

My previous employers did it as some kind of salary sacrifice so it was coming off your gross.

Also remember your contributions are taken into account for BIK calculation purposes.

yeah cheers.

i gather that the contributions are taken into account but it depends on if it's a capital contribution for trade up in which case it doesn't just reduce your BIK by the same amount it's not as beneficial as that

if you make the contribution for personal use then it does

im still not 100% on it

thing is if you leave the 4 year lease because you leave the company then you lose the car but are still liable for the contributions outstanding for the whole term!