Salary sacrifice leasing

Author
Discussion

carl0

33 posts

203 months

Friday 27th May 2022
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The PAYE system should work it through correctly. The salary sacrifice and pension contributions would result in a lower gross income giving you the effective tax relief broadly based on the scale above.

james-85tzl

24 posts

103 months

Friday 27th May 2022
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Cheers. That’s what I thought but octopus are suggesting I would pay the 40% rate for 11 months and then only pay the reduced rste on 63% for just the one month.

oop north

1,592 posts

127 months

Friday 27th May 2022
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Not quite sure I understand where you are, but the salary sacrifice works through PAYE immediately as your pay is reduced (as already mentioned).

Over £165k you will be saving income tax at 45% not 40% plus nic saving of 3.25%. 48.25% saving is still pretty decent smile

Heres Johnny

7,175 posts

123 months

Friday 27th May 2022
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Unless your tax code is reflecting your bonus and you're asked to make payments on account etc then it would depend on when the bonus is paid.

For most employees these things accumulate over the year, so at the end of Month 11 your salary todate for the year will be about 72k (11/12ths of 80k) and taxed based on 11/12s of your tax codes.- ie the top end of that will be at 40%.

When your bonus gets paid (assuming in March/Month 12), it becomes 130k salary YTD (or whatever you said) aganst your full tax code and the sums are run again, and the delta between the tax you've paid todate and what you now owe is what you'd pay..

Edited by Heres Johnny on Friday 27th May 14:46

Downward

3,490 posts

102 months

Saturday 11th June 2022
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https://www.fleetnews.co.uk/blog/wltp-and-tax-flee...


I’ve been looking into this but the scheme provider has the following message
“The manufacturer hasn’t submitted the WLTP figures for this model”

I’ve been looking at the Nissan Leaf and the Mazda CX30

snorkel sucker

2,662 posts

202 months

Monday 13th June 2022
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I'm still not able to find any sense of reasonableness behind the figures being quoted with our provider (Tusker).

40% taxpayer
Tesla Model 3 (standard model, no options, 48months 5k miles)
£810 gross / £490 net
P111D value = £45,935

Apparently our company are looking at alternative providers - I still feel the above is very expensive for what it is.

By comparison a performance model is £1032 / £625 on same terms / no options.

Anyone got any recent figures for comparison?




Heres Johnny

7,175 posts

123 months

Monday 13th June 2022
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The deal will probably include insurance and tyres, but the first lease deal I googled came back at £528 a month based on 8k miles as a personal lease. Insurance is maybe £40 a mo th and at 5k miles a year you won’t need tyres unless you have a puncture.All in its what, £70 a month or so saving as a company car, ignoring being crucified on any business was mileage.

These companies know the tax benefits make it still cheaper for you so they take a big chunk of that as extra profit. Depends as a tax payer whether you’d prefer your money to go to a lease company or to helping pay for the NHS.

SWoll

18,206 posts

257 months

Monday 13th June 2022
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Yep. SS really starts to make sense as an end user once you get into the £100-125k earnings bracket as savings are considerable. Another win for the already well off..

For anyone interested comcar have recently updated their SS calculator. Seems fairly accurate if you tweak some of the defaults.

https://comcar.co.uk/taxtools/salarysacrifice/

snorkel sucker

2,662 posts

202 months

Tuesday 14th June 2022
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SWoll said:
Yep. SS really starts to make sense as an end user once you get into the £100-125k earnings bracket as savings are considerable. Another win for the already well off..

For anyone interested comcar have recently updated their SS calculator. Seems fairly accurate if you tweak some of the defaults.

https://comcar.co.uk/taxtools/salarysacrifice/
That's really useful / interesting.

Using that calculator for a Tesla standard range, but with 10k miles over 48 months (10k is minimum it will let you set) gives a gross figure of £752/month and net figure of £461/month.

Whilst still not 'cheap' that seems a more reasonable figure. Tusker must be making a fortune.

Yidwann

1,872 posts

209 months

Thursday 16th June 2022
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Another person here who's researching and in at the ground level with the company potentially signing up to a SS scheme.

The common theme still seems to be the premiums put on the vehicles makes it hardly any difference so picking the right supplier seems key, seems to be Octopus are the ones to go for at the moment?

jinba-ittai

1,245 posts

209 months

Friday 17th June 2022
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snorkel sucker said:
SWoll said:
Yep. SS really starts to make sense as an end user once you get into the £100-125k earnings bracket as savings are considerable. Another win for the already well off..

For anyone interested comcar have recently updated their SS calculator. Seems fairly accurate if you tweak some of the defaults.

https://comcar.co.uk/taxtools/salarysacrifice/
That's really useful / interesting.

Using that calculator for a Tesla standard range, but with 10k miles over 48 months (10k is minimum it will let you set) gives a gross figure of £752/month and net figure of £461/month.

Whilst still not 'cheap' that seems a more reasonable figure. Tusker must be making a fortune.
There often seems to be a massive disconnect between the lease rates and P11D, sometimes same P11D value but 50% higher lease price - driven partly by the demand I guess, with Teslas being in short supply

+Teslas are a bit more expensive to insure



ashenfie

704 posts

45 months

Monday 20th June 2022
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Heres Johnny said:
Unless your tax code is reflecting your bonus and you're asked to make payments on account etc then it would depend on when the bonus is paid.

For most employees these things accumulate over the year, so at the end of Month 11 your salary todate for the year will be about 72k (11/12ths of 80k) and taxed based on 11/12s of your tax codes.- ie the top end of that will be at 40%.

When your bonus gets paid (assuming in March/Month 12), it becomes 130k salary YTD (or whatever you said) aganst your full tax code and the sums are run again, and the delta between the tax you've paid todate and what you now owe is what you'd pay..

Edited by Heres Johnny on Friday 27th May 14:46
Most likely the Tax code is wrong, they need to login to the paye tax pay and ensure the figures are correct

TheDrownedApe

1,016 posts

55 months

Monday 20th June 2022
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jinba-ittai said:
There often seems to be a massive disconnect between the lease rates and P11D, sometimes same P11D value but 50% higher lease price - driven partly by the demand I guess, with Teslas being in short supply

+Teslas are a bit more expensive to insure
I'm just looking at what i can get with Novuna and the lease costs are wildly different from their respective P11d prices. this C40 seems a bargain compared to the rest



Edited by TheDrownedApe on Monday 20th June 12:53

Downward

3,490 posts

102 months

Monday 20th June 2022
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Does anyone know what impact the impeding pension contribution rise will have ?
It’s going up about 0.7%

ChrisNic

592 posts

145 months

Monday 20th June 2022
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TheDrownedApe said:
I'm just looking at what i can get with Novuna and the lease costs are wildly different from their respective P11d prices. this C40 seems a bargain compared to the rest



Edited by TheDrownedApe on Monday 20th June 12:53
Take a look at Jag I-pace as well, through Novuna we will be paying £950 (gross) for an HSE Black which I’ve convinced myself is good value for a £78k car.

exactlyaron

2 posts

20 months

Tuesday 12th July 2022
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I assume the P2 is the obvious choice here? In terms of monthly cost - actual value view.

Taken the BIK value from nextgreencar, as the website I have access to doesn't calculate for you - so might not be 100% correct.




silent ninja

863 posts

99 months

Saturday 10th September 2022
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I looked at salary sacrifice 3 years ago before I got my current car. Pre pandemic and buying an ICE car, I thought the prices were fantasy and eye watering. Little did I know those were the cheap days. How things have changed in the consumer leasing and PCP market. Electric is the only thing that makes sense now.

I ordered the BMW iX3 M Sport yesterday for £515/month net over 4 years. It includes: unlimited mileage, insurance, service, maintenance, tyres and road tax. Doing all the maths, I'm barely paying more than my current car (SEAT Ateca 2019) and am getting a £62k car full to the brim with options - panoramic roof, adaptive dampers, high beam assist, reverse camera, park assist, powered tailgate, heated seats...the list goes on.

Test drove the iX3 a couple of times and it's frankly a brilliant family car. So refined and superior to the X3 ICE versions. Chose it over the Audi Q4 eTron and Kia Ev6 which are similarly priced.

I would never have gone electric without the huge tax discounts, but buying a new car now seems very expensive and I'm not sure prices will ever drop significantly (they tend to be sticky in an inflationary environment). The next 6 months could be a blood bath for retailers.

Edited by silent ninja on Saturday 10th September 08:06

James6112

4,199 posts

27 months

Thursday 15th September 2022
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My company are about to offer salary sacrifice for EV
You pay from gross salary, a supposed tax/ni saving.

At a glance it’s a bit of a con. The salary sacrifice price is grossly inflated, compared to a private buyer. Take off the tax/ni, as if by magic, naff all difference!

Looks like the lease company are effectively trousering if the tax/ni..

TBC when the numbers are confirmed.

TheDrownedApe

1,016 posts

55 months

Thursday 15th September 2022
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James6112 said:
My company are about to offer salary sacrifice for EV
You pay from gross salary, a supposed tax/ni saving.

At a glance it’s a bit of a con. The salary sacrifice price is grossly inflated, compared to a private buyer. Take off the tax/ni, as if by magic, naff all difference!

Looks like the lease company are effectively trousering if the tax/ni..

TBC when the numbers are confirmed.
Yet I see a big saving; just on one car though the Volvo C40 recharge. P11d price of £47630 and monthly gross at £617 for 36/10k. That's with maint and insurance too. find me a lease of ANY similar vehicle for £400 a month with no deposit

James6112

4,199 posts

27 months

Thursday 15th September 2022
quotequote all
TheDrownedApe said:
James6112 said:
My company are about to offer salary sacrifice for EV
You pay from gross salary, a supposed tax/ni saving.

At a glance it’s a bit of a con. The salary sacrifice price is grossly inflated, compared to a private buyer. Take off the tax/ni, as if by magic, naff all difference!

Looks like the lease company are effectively trousering if the tax/ni..

TBC when the numbers are confirmed.
Yet I see a big saving; just on one car though the Volvo C40 recharge. P11d price of £47630 and monthly gross at £617 for 36/10k. That's with maint and insurance too. find me a lease of ANY similar vehicle for £400 a month with no deposit
Sounds good.
A lot better than my offering !
Tesla looked like £850 gross, 36/10k.
Hopefully there will be better offers when confirmation comes through.