Salary sacrifice leasing

[SWoll]

jason61c said:

SWoll said:

Blimey, a blast from the past.

Didn't happen in the end, couldn't talk fleet into looking at it and have since moved on and joined the world of freelancers again.

The maths are still valid though, if your earnings hit the really punitive bands it's a no brainer.

yeah, sorry about the blast!

trying to work it out is difficult. Earlier today I was polestar or model 3 long range(for range only!). However now, it could be something much 'nicer'

Well, all I can add is that I saw my first Audi eTron GT on the road the other day and 'wow'. Looks more special than any of their RS ICE models and spec for spec considerably undercuts the Taycan 4S.

Bit of a wait though..

[jason61c]

As an overview does this sound right....

Earnings upto 50k, 20% saving
Earnings upto 100k 40% saving
Earnings 100-120k 63% saving(given the effective tax rate
earnings 130-150 47%(effective rate)

you can still contribute upto £40k pa into pensions etc also?

Given you do not get a Personal Allowance on taxable income over £125,140, effectively, if you put £40k into a pension, salary sacrifice doesn't make as much sense over £165,140?

[Otispunkmeyer]

My place just started offering this via ogilvie? never heard of them and their website has definitely been designed by an intern.

They've extended this to all employees. Salary sacrifice for those who don't also get a company car but believe its a similar sort of arrangement?

Anyway, no idea if its actually any good but the terms seem to be OK?

default setup is:

1 driver fully comp (can add additional drivers)
10k miles (can adjust)
fully maintained inc tyres
no down payment or initial fees
EVs only
24, 36 and 48 mth terms

You can get something like an ID3 Pro 58 kWh for what works out to be £350/m net (they're chunking 500 off you pre-tax).

41 week lead time on the ID3 though so seems a bit pointless going for one of those right now! haha.

I don't know what that is like? seems pretty good considering it covers everything, even insurance?

[Heres Johnny]

Otispunkmeyer said:

My place just started offering this via ogilvie? never heard of them and their website has definitely been designed by an intern.

They've extended this to all employees. Salary sacrifice for those who don't also get a company car but believe its a similar sort of arrangement?

Anyway, no idea if its actually any good but the terms seem to be OK?

default setup is:

1 driver fully comp (can add additional drivers)
10k miles (can adjust)
fully maintained inc tyres
no down payment or initial fees
EVs only
24, 36 and 48 mth terms

You can get something like an ID3 Pro 58 kWh for what works out to be £350/m net (they're chunking 500 off you pre-tax).

41 week lead time on the ID3 though so seems a bit pointless going for one of those right now! haha.

I don't know what that is like? seems pretty good considering it covers everything, even insurance?

Is that for the 2, 3 or 4 year term?

A quick google shows a personal lease for a life pro 58kwh can be had for about £300 a month over 3 years. Tyres are maybe 1 set over the life (£500) and insurance is maybe £1500 over 3 years), maintenance I think is virtually nothing, say £100, so call it £2100 over 3 years, £700 a year, about £60 a month. All up about £360 a month as a personal car

I think these companies know exactly what they're doing and are pricing it high because the tax man pays a lot of it, and those opting for it either think it must be a good deal (because they don't compare) or there's £50 a month in it which is enough for them although they are locked into a car for 3-4 years and get 4p for every company mile they drive)

[oop north]

jason61c said:

As an overview does this sound right....

Earnings upto 50k, 20% saving
Earnings upto 100k 40% saving
Earnings 100-120k 63% saving(given the effective tax rate
earnings 130-150 47%(effective rate)

you can still contribute upto £40k pa into pensions etc also?

Given you do not get a Personal Allowance on taxable income over £125,140, effectively, if you put £40k into a pension, salary sacrifice doesn't make as much sense over £165,140?

Ignoring the benefit in kind that you have to pay tax on (2% from next April) yes to the first table except you miss out the nic saving which will be 12% to £50k, then 2% to £100k

Yes pension contributions still ok.

But above £150k you get 47% at current rates. £126k to £150k it’s 42%. Your comment on the personal allowance baffles me!

Don’t forget the health and social care levy of 1.25% will also be a saving (at least I am not aware of any provision to say it won’t)

[SWoll]

Heres Johnny said:

Otispunkmeyer said:

My place just started offering this via ogilvie? never heard of them and their website has definitely been designed by an intern.

They've extended this to all employees. Salary sacrifice for those who don't also get a company car but believe its a similar sort of arrangement?

Anyway, no idea if its actually any good but the terms seem to be OK?

default setup is:

1 driver fully comp (can add additional drivers)
10k miles (can adjust)
fully maintained inc tyres
no down payment or initial fees
EVs only
24, 36 and 48 mth terms

You can get something like an ID3 Pro 58 kWh for what works out to be £350/m net (they're chunking 500 off you pre-tax).

41 week lead time on the ID3 though so seems a bit pointless going for one of those right now! haha.

I don't know what that is like? seems pretty good considering it covers everything, even insurance?

Is that for the 2, 3 or 4 year term?

A quick google shows a personal lease for a life pro 58kwh can be had for about £300 a month over 3 years. Tyres are maybe 1 set over the life (£500) and insurance is maybe £1500 over 3 years), maintenance I think is virtually nothing, say £100, so call it £2100 over 3 years, £700 a year, about £60 a month. All up about £360 a month as a personal car

I think these companies know exactly what they're doing and are pricing it high because the tax man pays a lot of it, and those opting for it either think it must be a good deal (because they don't compare) or there's £50 a month in it which is enough for them although they are locked into a car for 3-4 years and get 4p for every company mile they drive)

Price gouging 100%.

If on.to can supply a Life Pro Performance with alloy wheels,12k miles, insured, maintained, free public charging and a 1 month commitment for £559 then that SS quote is taking the piss?

[jason61c]

oop north said:

Ignoring the benefit in kind that you have to pay tax on (2% from next April) yes to the first table except you miss out the nic saving which will be 12% to £50k, then 2% to £100k

Yes pension contributions still ok.

But above £150k you get 47% at current rates. £126k to £150k it’s 42%. Your comment on the personal allowance baffles me!

Don’t forget the health and social care levy of 1.25% will also be a saving (at least I am not aware of any provision to say it won’t)

isn't that 1.25 percentage points, so almost a 12.5% increase?

with the personal allowance, I mean that window of 100k where you loose your personal tax free allowance.

[Otispunkmeyer]

Heres Johnny said:

Otispunkmeyer said:

My place just started offering this via ogilvie? never heard of them and their website has definitely been designed by an intern.

They've extended this to all employees. Salary sacrifice for those who don't also get a company car but believe its a similar sort of arrangement?

Anyway, no idea if its actually any good but the terms seem to be OK?

default setup is:

1 driver fully comp (can add additional drivers)
10k miles (can adjust)
fully maintained inc tyres
no down payment or initial fees
EVs only
24, 36 and 48 mth terms

You can get something like an ID3 Pro 58 kWh for what works out to be £350/m net (they're chunking 500 off you pre-tax).

41 week lead time on the ID3 though so seems a bit pointless going for one of those right now! haha.

I don't know what that is like? seems pretty good considering it covers everything, even insurance?

Is that for the 2, 3 or 4 year term?

A quick google shows a personal lease for a life pro 58kwh can be had for about £300 a month over 3 years. Tyres are maybe 1 set over the life (£500) and insurance is maybe £1500 over 3 years), maintenance I think is virtually nothing, say £100, so call it £2100 over 3 years, £700 a year, about £60 a month. All up about £360 a month as a personal car

I think these companies know exactly what they're doing and are pricing it high because the tax man pays a lot of it, and those opting for it either think it must be a good deal (because they don't compare) or there's £50 a month in it which is enough for them although they are locked into a car for 3-4 years and get 4p for every company mile they drive)

That was 3 year term.

Yes, looking around you might be right. Its not any better than what you can do yourself.

Model 3 is something like £600 and the dual motor is nearly £700 (post taxation, so that must be around £1000 or more pre-tax? I can't actually see because I am not allowed to sacrifice that much so it won't quote me)

[jako1]

Looks like they're all jumping on it. My company has also started.

I get an allowance of net £300pcm

Therefore if I pick the right car I can effectively get a really nice car for "free" due to the tax savings.

Whereas before £300 wouldn't get you much nevermind the tax, insurance & service...

Unless the company car list is updated with some much better cars, surely I'm better sacrificing my salary?

[Cascade360]

Otispunkmeyer said:

That was 3 year term.

Yes, looking around you might be right. Its not any better than what you can do yourself.

Model 3 is something like £600 and the dual motor is nearly £700 (post taxation, so that must be around £1000 or more pre-tax? I can't actually see because I am not allowed to sacrifice that much so it won't quote me)

This is the indicative quote (including insurance and maintenance) on my private employer's salary sacrifice scheme for a Tesla Model 3 Saloon Standard Plus Auto RWD with no options, 5000 mile a year / 36 months. Based on comparison site quotes, I would normally be paying around 750 quid a year / 62.50 a month to insure a Tesla Model 3.



It seems the monthly gross salary sacrifice is massively inflated compared to personal lease, but the price after tax benefits is cheaper.

Three questions:

1) I assume if the salary sacrifice (so in this case, 11.1k or so a year) drops you below 125k, the effective rate is cheaper as some of the savings is now at the 62% marginal rate?
2) Is there a risk of BIK etc rules changing mid way through lease, reducing tax savings materially?
3) What's the impact of pension contributions into a normal DC scheme? The FAQ suggests it is all done after that is discounted - so effectively no impact?

[jason61c]

Cascade360 said:

Otispunkmeyer said:

That was 3 year term.

Yes, looking around you might be right. Its not any better than what you can do yourself.

Model 3 is something like £600 and the dual motor is nearly £700 (post taxation, so that must be around £1000 or more pre-tax? I can't actually see because I am not allowed to sacrifice that much so it won't quote me)

This is the indicative quote (including insurance and maintenance) on my private employer's salary sacrifice scheme for a Tesla Model 3 Saloon Standard Plus Auto RWD with no options, 5000 mile a year / 36 months. Based on comparison site quotes, I would normally be paying around 750 quid a year / 62.50 a month to insure a Tesla Model 3.



It seems the monthly gross salary sacrifice is massively inflated compared to personal lease, but the price after tax benefits is cheaper.

Three questions:

1) I assume if the salary sacrifice (so in this case, 11.1k or so a year) drops you below 125k, the effective rate is cheaper as some of the savings is now at the 62% marginal rate?
2) Is there a risk of BIK etc rules changing mid way through lease, reducing tax savings materially?
3) What's the impact of pension contributions into a normal DC scheme? The FAQ suggests it is all done after that is discounted - so effectively no impact?

I think BIK are set for the next 3.5years.

Pension contributions aren't affected.

If your earnings are fixed and you can make it work in that marginal 60 odd percent rate, it can work out well. I've got model 3 long range on a company car lease, 12kpa paint/wheels at circa £600. To SS would cost myself more based on my set of circumstances, it does vary for everyone!

[SWoll]

The quote above is almost £400 a month more expensive than you could get yourself, with maintenance.



Absolute piss take. £33k for 3 years in a £41k car. Pull the other one, that's proper price gouging right there.

[SDK]

SWoll said:

The quote above is almost £400 a month more expensive than you could get yourself, with maintenance.



Absolute piss take. £33k for 3 years in a £41k car. Pull the other one, that's proper price gouging right there.

The net cost in the SS Tesla example is £642 per month, not £925.
Yes it’s probably not the cheapest way of using that car but one of the most convenient - just add electricity.

Edited by SDK on Saturday 16th October 04:09

[SWoll]

SDK said:

The net cost in the SS Tesla example is £642 per month, not £925.
Yes it’s probably not the cheapest way of using that car but one of the most convenient - just add electricity.

Edited by SDK on Saturday 16th October 04:09

NET cost is meaningless in that comparison. My point is that even after the tax 'saving' you are still paying more than someone leasing direct, which is ridiculous. If you keep the car for the full term the finance company are making almost £15k (75%) more than on a personal lease, which is ridiculous.

The cost to you should be < £500 a month IMHO.

[jason61c]

SWoll said:

SDK said:

The net cost in the SS Tesla example is £642 per month, not £925.
Yes it’s probably not the cheapest way of using that car but one of the most convenient - just add electricity.

Edited by SDK on Saturday 16th October 04:09

NET cost is meaningless in that comparison. My point is that even after the tax 'saving' you are still paying more than someone leasing direct, which is ridiculous. If you keep the car for the full term the finance company are making almost £15k (75%) more than on a personal lease, which is ridiculous.

The cost to you should be < £500 a month IMHO.

Exactly this. £600 net cost gets you a tycan.

[SWoll]

jason61c said:

SWoll said:

SDK said:

The net cost in the SS Tesla example is £642 per month, not £925.
Yes it’s probably not the cheapest way of using that car but one of the most convenient - just add electricity.

Edited by SDK on Saturday 16th October 04:09

NET cost is meaningless in that comparison. My point is that even after the tax 'saving' you are still paying more than someone leasing direct, which is ridiculous. If you keep the car for the full term the finance company are making almost £15k (75%) more than on a personal lease, which is ridiculous.

The cost to you should be < £500 a month IMHO.

Exactly this. £600 net cost gets you a tycan.

You certainly shouldn't be far off even with maint and insurance added.



No surprise so many companies seem to be jumping on the SS bandwagon at the minute.

[Heres Johnny]

SWoll said:

You certainly shouldn't be far off even with maint and insurance added.



No surprise so many companies seem to be jumping on the SS bandwagon at the minute.

The gov need to fix this too, time to introduce a cap on the price and encourage smaller cheaper cars as it is they're just pouring money away. They've done it with the grants.

Someone asked about BIK changes, from memory the last time they did these sorts of changes any existing company cars were locked in at the old rate until renewal. I seem to recall for non EVs the BIK is the higher of the actual cost and the % of the price (they basically hit/addressed all salary sacrifice arrangements where it was done purely to exploit loop holes like supermarket vouchers). EVs escaped because of the green agenda. I'm not sure the intention was to line lease companies pockets.

[NSS89]

Cascade360 said:

This is the indicative quote (including insurance and maintenance) on my private employer's salary sacrifice scheme for a Tesla Model 3 Saloon Standard Plus Auto RWD with no options, 5000 mile a year / 36 months. Based on comparison site quotes, I would normally be paying around 750 quid a year / 62.50 a month to insure a Tesla Model 3.



It seems the monthly gross salary sacrifice is massively inflated compared to personal lease, but the price after tax benefits is cheaper.

Three questions:

1) I assume if the salary sacrifice (so in this case, 11.1k or so a year) drops you below 125k, the effective rate is cheaper as some of the savings is now at the 62% marginal rate?
2) Is there a risk of BIK etc rules changing mid way through lease, reducing tax savings materially?
3) What's the impact of pension contributions into a normal DC scheme? The FAQ suggests it is all done after that is discounted - so effectively no impact?

Is this via Zenith by any chance? My employer is also about to offer its employees a SS scheme and I’ve been given access to the portal as a demo. It looks the same as your screenshot. When I first looked up the Model 3 SR+ it was £425 for 20% tax payer. I logged in again yesterday to have a look and now it’s showing as £595. Not sure why the change but will check again which it actually goes live next month.

[ChocolateFrog]

I think this is how my OH got her ID3.

£230 all in, £10k per year over 3 years through Hitachi. The price seems ridiculously cheap to me, middle battery with the top motor. Insurance and maintenance included.

She was spending £150 pm in fuel on her Citroen before this so it's a huge no brainer.

She's not a higher rate tax payer though, which I'm guessing makes it less relevant to this thread.

[Cascade360]

SDK said:

SWoll said:

The quote above is almost £400 a month more expensive than you could get yourself, with maintenance.



Absolute piss take. £33k for 3 years in a £41k car. Pull the other one, that's proper price gouging right there.

The net cost in the SS Tesla example is £642 per month, not £925.
Yes it’s probably not the cheapest way of using that car but one of the most convenient - just add electricity.

Edited by SDK on Saturday 16th October 04:09

The net cost for a 45% tax payer is cheaper than the personal lease quoted, by a little - remembering it includes insurance, so comparator is 460 quid (assuming 60 or so a month insurance) a month to your 550 quid a month.

I figure they price gouge on the pre-tax price in the knowledge the majority that take it are in the 40/45% tax bracket.

Edited by Cascade360 on Monday 18th October 09:36

Edited by Cascade360 on Monday 18th October 09:40