I don’t want to labour the point that others have already made, but that really is eye watering-ly expensive. Leaseloco is currently showing business lease cost on those terms (1+47 / 10k per year) of £600 plus a bit more for your paint option. There is no maintenance, you might do one set of tyres during the lease and the insurance will be no more than £100-150 per month. £800-900 gross tops seems about right, less if your employer is giving back the NI. Someone is making A LOT of money!
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New salary sacrifice prices
- Thread starter Basicbob
- Start date
I don’t want to labour the point that others have already made, but that really is eye watering-ly expensive. Leaseloco is currently showing business lease cost on those terms (1+47 / 10k per year) of £600 plus a bit more for your paint option. There is no maintenance, you might do one set of tyres during the lease and the insurance will be no more than £100-150 per month. £800-900 gross tops seems about right, less if your employer is giving back the NI. Someone is making A LOT of money!
Some of these salsac prices are insane.
Model 3 LR, 10kmpa, 3 years, £285 NET for me inside my own company.
what about the pension contributions and its impact over 3 years? it is a big issue with NHS SS schemes as I heard!
Some lease companies take 100% of the risks including if an employer leaves the job without returning the car or returns the car before the end of the lease or refuses to pay when they damage the car. A standard company car lease puts all these risks on the employer.
There is also the issue of how much of the saved employer NI the employer keeps to cover the admin costs of having more complex PAYE.
I expect your company is taking the risk if you don't return the car or lose your job etc.
The bigger concern is that salsac reduces pensionable pay, £1k a month on a Tesla could result in your pension being significantly less. Fancy paying for that expensive salsac car in your retirement too? No thanks. Insane.
For many NHS consultants a reduction in pensionable pay can increase there useful pension due to how the increase in deemed value of the NHS pension is taxed.
It is a salsac as it reduces the pot of money you could have used to pay yourself a larger sal or more divs.
tj333
Member
My company maintain my pension contributions at a percentage of my basic salary before the salsac is taken into account so no downside for me there. They also put all of the NI back in the pot which reduces the gross salsac. My top slice income is in the 62p marginal rate band - if I wasn’t salsac for the car I’d be putting it in my pension, but I’m likely to run into lifetime allowance issues within a few years if I continue to do that. For all these reasons the scheme is very attractive for me - it all depends on your personal circumstances. I pay £832 gross for a grey M3 LR 1+35 20k miles per year including insurance tyres etc.
An employee refuses to return the car…. That’s known as theft. Refuses to pay when they damage the car.. a deduction from earnings fixes that. Im fairly sure the the companies charging these high rates also go after damages alloys etc from the company car driver, the half dozen company cars I’ve had in my time have all been like that.
The only real risk I see is if an employee leaves and the lease company have to dispose of the car earlier than expected. I’m not sure that’s a £300 a month problem.
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Salary sacrifice leases contain payment terms if the car is handed back early. From memory, mine is £3.5k then £2.3k then £1.3k. But I took out my lease last March, when Y residuals were higher than the new price. If I handed back my car now, the lease company would be taking a bath.
My response was in relation to some of the NHS schemes where this is widely reported, not your specific pension which I have no knowledge of.
If my nan had wheels she'd have been a bicycle.
It isn't a salac scheme as I am not reducing the amount of my salary, and paying huge fees to a salsac provider for the privilege, for a start.
Anyone with good accountancy background may be able to help some of the subtle differences?
I am a bit confused as to how much this would impact NHS pension
I was quoted just less than £900 gross with £111 pension payments with a net of £600 a month on a 3 year lease (salary sacrifice)
would my pension just be reduced by £111 x 36 or does my overall gross pay get taken into account ?
thanks
I was quoted just less than £900 gross with £111 pension payments with a net of £600 a month on a 3 year lease (salary sacrifice)
would my pension just be reduced by £111 x 36 or does my overall gross pay get taken into account ?
thanks
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