Salary Sacrifice and benefit

[TheDrownedApe]

I've asked my HR but they are clueless and have forwarded it elsewhere; likely to get a quicker response on here.


Why is the Benefit showing as £931?

[randlemarcus]

That's roughly what the car tax calculator here shows, give or take a bit for the lease length and mileage. What did you think it should be?

https://www.fleetnews.co.uk/cars/car-tax-calculato...

[Random Account No6]

They’ve worked it (tax saving on the £8k) out across the bands haven’t they, that’s a little odd ain’t it??

(Saying this as someone who hasn’t salary sacrificed a car though)

[Scrump]

List price for that car is £47,630
BIK tax rate for a pure EV is 2%
2% of £47,630 is £952.60
You then pay tax on the £952.60 at your highest PAYE income tax rate.

Not sure why it is actually £931, the BIK rate of 2% was lower last year so maybe you had a period at the slightly lower rate.

Edit, ignore the bit about lower rates last year as I see your posted image is for the current tax year.

Edited by Scrump on Wednesday 9th August 12:32

[TheDrownedApe]

randlemarcus said:

That's roughly what the car tax calculator here shows, give or take a bit for the lease length and mileage. What did you think it should be?

https://www.fleetnews.co.uk/cars/car-tax-calculato...

that's the whole point, i have no idea what this figure is purporting to be. Car benefit?

I understand i will pay tax at a rate determined by my tax rate; but this will never be £931, rather a figure listed below. I took the car to drop me below the 40% tax threshold and taking off the gross my income will be under the 40% threshold.

[phil-sti]

TheDrownedApe said:

randlemarcus said:

That's roughly what the car tax calculator here shows, give or take a bit for the lease length and mileage. What did you think it should be?

https://www.fleetnews.co.uk/cars/car-tax-calculato...

that's the whole point, i have no idea what this figure is purporting to be. Car benefit?

I understand i will pay tax at a rate determined by my tax rate; but this will never be £931, rather a figure listed below. I took the car to drop me below the 40% tax threshold and taking off the gross my income will be under the 40% threshold.

Looks like a standard company car benefit. Your tax should be 20% (rate of tax paid) of the taxable total if I remember right, £186.20 for the year

Edited by phil-sti on Wednesday 9th August 12:39

[TheDrownedApe]

phil-sti said:

Looks like a standard company car benefit. Your tax should be 20% (rate of tax paid) of the taxable total if I remember right, £186.20 for the year

Edited by phil-sti on Wednesday 9th August 12:39

yeah I'm starting to understand but i don't see why they call it a benefit?

In addition 2% of the P11d is £952, not £931 as Scrump pointed out.

Lastly - I've been in and altered my income for this year (my company never gets my PAYE salary right) taking into account my lease and other bonuses i'm getting later in the year.

So when i enter my "earnings" do i stick my actual in, ignoring the monthlies for the car, and assume HMRC will do that?

ie: Earn 40k, bonus of 4k, pension of 13k = total earnings £57k

or

Earn 40k, bonus of 4k, pension of 13k, minus SS of £8k = total earnings £49k

[TheDrownedApe]

CheesecakeRunner said:

The latter.

i thought so

[Kirkmoly]

931 is correct. You got the car on April 14, not April 6.

[TheDrownedApe]

Kirkmoly said:

931 is correct. You got the car on April 14, not April 6.

oh right, thanks

[Muzzer79]

TheDrownedApe said:

yeah I'm starting to understand but i don't see why they call it a benefit?

Having a company car is a benefit to you. 'Company car tax' is therefore called Benefit in Kind.

Your £931 is the company car tax you're paying on the car.