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Discussion in 'The UK and Ireland' started by Pagemakers, Jan 16, 2020.
You also need to add back 50% of VAT on rental charge.
You can claim 50% of the vat if vat registered.
Yes that’s right.
My point was that the ex vat price will not be the salary sacrifice amount
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.
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.
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
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
I've also had the "computer says no" response from our finance folk. Some of the barriers were around liability if you leave etc etc (they didn't like my answer that I would be less likely to leave ...).
Has anyone got materials on how to persuade lazy ^d^d^d^ cautious finance and HR folk ?
(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.
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.
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...
Ingorance calling - how do I send a DM ?
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.
Must say my pension fund is looking very healthy due to this but that is over 10 years away
click on my username, and in the new window that appears "start a conversation"
Drive a nice car, or retire by 55, then drive a nice car...
Or drive a nice car, retire at 55 and then drive another nice car
sounds like the same man maths I used to convince the wife when I got mine
Can anyone give me an indication of what sort of money would be involved in salary sacrificing for an X ?
(just indicative amount of gross monthly salary and what the impact of current tax - from that I can do my man maths lol)
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