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Salary Sacrifice
- Thread starter Pagemakers
- Start date
SimonT
Member
JupiterMan
Active Member
Also depends on the employer and its VAT position.
I'm going through this process at the moment with my employer, and as my line of business does not pay much in the way of VAT, our accountant has confirmed that no VAT will be reclaimable, so the full 20% VAT will be included in the salary sacrifice cost calculation for me.
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JupiterMan
Active Member
Another saving to consider that is not factored into the salary sacrifice quotes is child benefit for those of us with kids.
If you currently earn over £50k this benefit is phased out to zero once income is greater than £60k. However, if the salary sacrifice puts your earnings back down into this bracket (or lower) then you could again become entitled to some of this benefit.
Remember that spouses income is also taken into consideration, so if their income is over £50K this may not work.
I've done a spreadsheet to do the math, and for me this knocks the net price down by a further £50 per month. For some people this saving could be more.
If you currently earn over £50k this benefit is phased out to zero once income is greater than £60k. However, if the salary sacrifice puts your earnings back down into this bracket (or lower) then you could again become entitled to some of this benefit.
Remember that spouses income is also taken into consideration, so if their income is over £50K this may not work.
I've done a spreadsheet to do the math, and for me this knocks the net price down by a further £50 per month. For some people this saving could be more.
In a similar context, if you’re individually earning between £100k and £125k you’ll effectively be getting 60% income tax relief due to the tapered personal allowance
IanB
Member
I am trying my best to convince my HR department to look into this and do such a scheme, feel I am fighting a losing battle though
Really frustrating, especially as Tusker are on the same business park as my HR department, just a couple of doors down
Prudence calling
(but I'm not a financial advisor !)
While the tax rules make doing this look really attractive you are still reducing your gross salary. You could also choose to transfer this into your pension and get the same (possibly even more) benefit - being able to retire a little earlier and/or have a bigger pension.
That's making my choice as to whether to go for this more difficult.
(but I'm not a financial advisor !)
While the tax rules make doing this look really attractive you are still reducing your gross salary. You could also choose to transfer this into your pension and get the same (possibly even more) benefit - being able to retire a little earlier and/or have a bigger pension.
That's making my choice as to whether to go for this more difficult.
JupiterMan
Active Member
I've had the same kick back - essentially the employer not wanting to be left with an ongoing car lease for the balance of the term should I leave or be fired.
Octopus salary sacrifice scheme is however able to offer leaver protection (additional 5% cost to the lease) which means the car can be returned to the leasing company on leaving employment - removing that liability for the employer.
if you send me a DM with your email I can forward you the Octopus salary sacrifice car scheme agreement which has the full details and terms.
JupiterMan
Active Member
Prudence calling
(but I'm not a financial advisor !)
While the tax rules make doing this look really attractive you are still reducing your gross salary. You could also choose to transfer this into your pension and get the same (possibly even more) benefit - being able to retire a little earlier and/or have a bigger pension.
That's making my choice as to whether to go for this more difficult.
If your employer is happy, and legal minimums/maximums are adhered to, there is nothing stopping you doing salary sacrifice for both a car and pension.
Car Salary sacrifice works if you were going to get a new car anyway, as it makes it cheaper and/or allows you to get a better spec car.
If the question is should I buy a new car OR put money into a pension then that is a little different...
IanB
Member
That is exactly what I do currently and have done for a few years now, contribute through salary sacrifice to my pension top up scheme so I fall below 50k, I am willing to drop my contributions to this and have some go to fund a model 3 instead, just need HR on board.Prudence calling
(but I'm not a financial advisor !)
While the tax rules make doing this look really attractive you are still reducing your gross salary. You could also choose to transfer this into your pension and get the same (possibly even more) benefit - being able to retire a little earlier and/or have a bigger pension.
That's making my choice as to whether to go for this more difficult.
Must say my pension fund is looking very healthy due to this but that is over 10 years away
JupiterMan
Active Member
click on my username, and in the new window that appears "start a conversation"Ingorance calling
MrBadger
Badger out
Ant M3
Member
sounds like the same man maths I used to convince the wife when I got mine
I'd suspect you'd be looking at a salary sacrifice of around £1,100-£1,200a month unless you're on some mental NHS fleet scheme which appears to be halfprice on Teslas
If you're a Higher rate tax payer that's gonne cost you around £650-£700 a month in net pay
If you're a basic rate tax payer getting a model X... you're a maniac
If you're a Higher rate tax payer that's gonne cost you around £650-£700 a month in net pay
If you're a basic rate tax payer getting a model X... you're a maniac
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