Salary Sacrifice

[JupiterMan]

As CEO you could go for a straight business lease, however if you are doing it through salary sacrifice you will need a quote on that basis, which can be more expensive as it protects the employer should circumstances change.

Phone octopus and ask for a salary sacrifice quote which they can sort for you.

this quote will then factor in the tax and NI savings to show the net cost to you, make sure you advise them of company VAT status so this is set up correctly.

you may also need to think about affect on pensions (by having a reduced salary) but as CEO you may be able to work around that.

Tesla do not offer salary sacrifice schemes direct, so you will need to go through someone like Octopus for those tax savings.

 

[shrimpergarry]

As CEO you could go for a straight business lease, however if you are doing it through salary sacrifice you will need a quote on that basis, which can be more expensive as it protects the employer should circumstances change.

Phone octopus and ask for a salary sacrifice quote which they can sort for you.

this quote will then factor in the tax and NI savings to show the net cost to you, make sure you advise them of company VAT status so this is set up correctly.

you may also need to think about affect on pensions (by having a reduced salary) but as CEO you may be able to work around that.

Tesla do not offer salary sacrifice schemes direct, so you will need to go through someone like Octopus for those tax savings.

Thanks @JupiterMan - that's really helpful advice. I'm bombarding Mr Octopus with lots of questions at the moment!

 

[SimonT]

I am sure the salary sacrifice side of things are sorted by your payroll department. It’s just a straight forward business lease between your company and the lease Company.

previous poster is correct on pension but as a counter most companies should give you their 13% NI saving which more than makes up for it.

also we allow the theoretical business fuel saving that the company would have paid as well.

 

[JupiterMan]

It’s just a straight forward business lease between your company and the lease Company.

The salary sacrifice lease is different to a normal business lease, as it protects the employer should the employee fall pregnant, resign, get fired, long term illness etc....

If the employer does a normal business lease with their own sacrifice through payroll they could be saddled with car for the remaining term, at their cost, should the employee leave the company.

The salary sacrifice wording is also HMRC approved for these schemes, that's not to say you could not do your own wording, but the risk then falls on the employer should it be questioned.

 

[SimonT]

maybe we are implementing the scheme incorrectly?

 

[Joelly]

FWIW, my pension contribution is unaffected by my salary sacarifice. My pension contribution is from my notional salary which is unchanged.

 

[Eljaybe]

Moderator comment - thread merged from "Is this salary sacrifice scheme worth it?"

Hi all,

Considering an M3 for my next car, I currently own a VW E-Golf and I would definitely not go back to an ICE now. Anybody else made the jump from an E-Golf to a Tesla?

My employer offers a salary sacrifice scheme, where the monthly repayments for the lease come out pre-tax/NI. The vehicle is returned to my employer in the even that I am made redundant or voluntarily leave the company.

The monthly repayments come in at:

- £547 for the Standard Range Plus (no deposit)
- £585 for the Long Range (no deposit)

Does this sound reasonable to you? And do you think the additional £38 a month is worth it for the Long Range model?

The monthly repayments also include insurance, servicing, roadside recovery and 8000 free miles. When my current lease is returned in a few months time I know I am going to get another EV, but I'm trying to justify the cost of the Tesla. It truly is a dream car for me, but I only do around 6000 miles a year at the moment.

 

[GeorgeSymonds]

Do you drive many business miles (probably not given you only fo 6000 miles)? If you do the rate you can claim back is only 4p a mile whereas if its your own car it can be as much as 45p a mile depending on your employers policy and what they give you less than that you can claim back against tax.

Are the figures from your gross pay or paypacket reductions? £585 becomes virtually half that if you pay high rate tax and about 3/4 that if you don't. Under £300 a month deducted from take home pay for a fully financed and insured car is a bargain if you don't do many business miles, if its £585 reduction in take home pay and you do 10k business miles a year (more for other peoples benefit given your mileage) and would miss out on potentially an extra £4k in fuel costs a year then its very expensive.

 

[Gatsojon]

Taken from the LHS of the payslip, that sounds an absolute bargain. I wish I could convince my employer to do similar.

And yes, the LR is worth the extra. I should caveat that with IMHO and that sort of thing but just take the LR and I look forward to reading your enthusiastic feedback

 

[btc1k]

Salary sacrifice deals are great at first glance, particularly at the moment with low BiK.

However, be very careful if the SS affects your pension - it some cases, particularly if you are on a defined benefits scheme, the numbers can be shocking.

I saw a calculation for a NHS employee. The pre-tax deduction was £900, higher rate tax payer so he was over the moon at getting a car for £450 after tax. Until it was pointed out that -£43,200 less qualifying earnings over 4 years, meant that the loss of pension equated to the car costing near the pre-tax sum again. Oops.

Basically I'd always say the SS at the moment is great but get to know the numbers inside out. I run my own business so am used to looking at it this way!

 

[Somex]

Hi all,

Considering an M3 for my next car, I currently own a VW E-Golf and I would definitely not go back to an ICE now. Anybody else made the jump from an E-Golf to a Tesla?

My employer offers a salary sacrifice scheme, where the monthly repayments for the lease come out pre-tax/NI. The vehicle is returned to my employer in the even that I am made redundant or voluntarily leave the company.

The monthly repayments come in at:

- £547 for the Standard Range Plus (no deposit)
- £585 for the Long Range (no deposit)

Does this sound reasonable to you? And do you think the additional £38 a month is worth it for the Long Range model?

The monthly repayments also include insurance, servicing, roadside recovery and 8000 free miles. When my current lease is returned in a few months time I know I am going to get another EV, but I'm trying to justify the cost of the Tesla. It truly is a dream car for me, but I only do around 6000 miles a year at the moment.

I made the change in March from the e-golf I’ve had for the last 3 years.
I picked SR+ as I could not justify the extra cost of a LR for the typical journeys I do. (Slightly more total mileage a year than you)
The fact that Tesla have such a good charger infrastructure means that the odd longer journey is much less hassle than it was with the e-golf. Don’t regret the change at all, the cars are very different, but I have 2 kids approaching their teens and the e-golf was getting a bit cramped especially for shopping! The Tesla boot (plus frunk!) is vastly bigger.
Which model is best for you depends entirely on your predicted usage (and budget)
Your quoted lease costs struck me as high based on what others have said, but I hasten to add, I am not au fait with lease deal costs.
AFA comparing the 2 cars, the Tesla is a much harsher ride than the e-golf, particularly on poor road surfaces, the performance is better on the Tesla. Software has more options and flexibility than the e-golf and consequently, together with the fact that it’s all controlled by the screen, takes some getting used to.
TBH the only thing I miss from the e-golf is Apple Car Play. Oh, and the thing I don’t miss is VW trying to take my trousers down at “service” time

 

[Eljaybe]

Do you drive many business miles (probably not given you only fo 6000 miles)? If you do the rate you can claim back is only 4p a mile whereas if its your own car it can be as much as 45p a mile depending on your employers policy and what they give you less than that you can claim back against tax.

Are the figures from your gross pay or paypacket reductions? £585 becomes virtually half that if you pay high rate tax and about 3/4 that if you don't. Under £300 a month deducted from take home pay for a fully financed and insured car is a bargain if you don't do many business miles, if its £585 reduction in take home pay and you do 10k business miles a year (more for other peoples benefit given your mileage) and would miss out on potentially an extra £4k in fuel costs a year then its very expensive.

Thanks for your insights, that’s good to know. I don’t drive any business miles, the vehicle is for personal use only.

Those figures are the net deducted from my pay packet after the tax and NI savings. So, with that in mind maybe these prices are rather steep?

 

[Eljaybe]

I made the change in March from the e-golf I’ve had for the last 3 years.
I picked SR+ as I could not justify the extra cost of a LR for the typical journeys I do. (Slightly more total mileage a year than you)
The fact that Tesla have such a good charger infrastructure means that the odd longer journey is much less hassle than it was with the e-golf. Don’t regret the change at all, the cars are very different, but I have 2 kids approaching their teens and the e-golf was getting a bit cramped especially for shopping! The Tesla boot (plus frunk!) is vastly bigger.
Which model is best for you depends entirely on your predicted usage (and budget)
Your quoted lease costs struck me as high based on what others have said, but I hasten to add, I am not au fait with lease deal costs.
AFA comparing the 2 cars, the Tesla is a much harsher ride than the e-golf, particularly on poor road surfaces, the performance is better on the Tesla. Software has more options and flexibility than the e-golf and consequently, together with the fact that it’s all controlled by the screen, takes some getting used to.
TBH the only thing I miss from the e-golf is Apple Car Play. Oh, and the thing I don’t miss is VW trying to take my trousers down at “service” time

Thanks Somex, that’s really good to know! Glad you are happy with the M3. I also find the cargo space a bit limiting in the E-Golf.

How do you find the interior quality of the Tesla compared to the Golf? I do like the quality of materials in the VW.

 

[btc1k]

Thanks for your insights, that’s good to know. I don’t drive any business miles, the vehicle is for personal use only.

Those figures are the net deducted from my pay packet after the tax and NI savings. So, with that in mind maybe these prices are rather steep?

I incorrectly assumed they were the gross figures not the net!

My company lease on an LR is £579 - net it's £325. (3yrs 10kmpa)

 

[Somex]

Thanks Somex, that’s really good to know! Glad you are happy with the M3. I also find the cargo space a bit limiting in the E-Golf.

How do you find the interior quality of the Tesla compared to the Golf? I do like the quality of materials in the VW.

Its not quite the same quality, but to be fair, its not too bad and quite acceptable, far better than that awful stuff in the ID3!

 

[Eljaybe]

I incorrectly assumed they were the gross figures not the net!

My company lease on an LR is £579 - net it's £325. (3yrs 10kmpa)

Wow, that is quite the difference. Does that monthly cost include insurance?

 

[Mrklaw]

Thanks for your insights, that’s good to know. I don’t drive any business miles, the vehicle is for personal use only.

Those figures are the net deducted from my pay packet after the tax and NI savings. So, with that in mind maybe these prices are rather steep?

I'm paying less than that for a SR+ buying outright with a loan from Tesla. That seems really high (I do wonder if some lease companies might take the mick with prices knowing there is a discount to the 'end user' through SS?)

 

[Eljaybe]

I'm paying less than that for a SR+ buying outright with a loan from Tesla. That seems really high (I do wonder if some lease companies might take the mick with prices knowing there is a discount to the 'end user' through SS?)

Interesting, thank you!

When I look at the loan option from Tesla it does come in ~£50 a month cheaper, but that is with a £9000 deposit.

When I take into account the cost of insurance with is included in the monthly repayments (~£100 a month for me) and the £0 deposit, £547 for the SR+ all in seemed like a good deal to me.

 

[Bantam]

Interesting, thank you!

When I look at the loan option from Tesla it does come in ~£50 a month cheaper, but that is with a £9000 deposit.

When I take into account the cost of insurance with is included in the monthly repayments (~£100 a month for me) and the £0 deposit, £547 for the SR+ all in seemed like a good deal to me.

FWIW before my company withdrew their Salary sacrifice scheme (pre COVID), IIRC I was being quoted approx £600pm on a LR with 15K miles a year on a 48 month lease, this included insurance/servicing/tyres and no deposit up front.

 

[Mrklaw]

Interesting, thank you!

When I look at the loan option from Tesla it does come in ~£50 a month cheaper, but that is with a £9000 deposit.

When I take into account the cost of insurance with is included in the monthly repayments (~£100 a month for me) and the £0 deposit, £547 for the SR+ all in seemed like a good deal to me.

ok that insurance is high so becomes more attractive.