Dilemma

[fredgroves]

The end of salary sacrifice for cars is quite simple to explain - at the moment you pay for your car out of your gross salary, saving you and your employer tax. This saving is why you do it.

Under the new regime, you don't.

Its actually more complex than that as you will still pay BIK as now but then an additional charge will be levied to top BIK up to the same money you'd have paid HMRC if you had taken cash instead. (I have zero faith in my payroll department getting that right...)

Whether this amount of extra money you have to find is big or small depends on how you've chosen your car. If you've chosen to drive a 4.5l v8 jag, it won't make any difference.

If you've chosen to drive a 1.0 Up! it will. You will effectively pay the same tax rate for the Up! as the Jag.

I suppose there are still some benefits to a company car after all of this, but I'm struggling to think of them.

[mcmaddy]

Do it on a nett scheme instead, at least that way your contribution offsets your bike at year end. We run both at my council but I can't see why anyone will want to remain on the gross scheme once the rules change.

[fredgroves]

Hmmm if you did a net scheme would all of your lease payments be employee capital contribution?

I'm not sure if personal contributions to lease payments (which in the case of most of schemes is the employee actually paying the entire lease cost!) are capital contributions.

I was reading this:

http://www.accountingweb.co.uk/any-answers/can-you-make-a-capital-contribution-on-a-leased-car

Having said that, i still find it galling that a car that i pay 100% of the costs for is considered a "company" vehicle and i'm paying BIK on it. The only benefit is/was the tax advantage of paying it from gross salary...

Essentially the only bit the company front are the initial payment deposit and the insurance (which actually I have to bloody pay too) and maybe covering the liability of the lease ending before 3 years (if they fire me!) i suppose!

[mcmaddy]

In the eyes of HMRC because the car is sourced and leased through your employer and not you it's a company car. That's what our scheme is like, technically a sub lease. On the net scheme all of your monthly contributions offset your bik as you aren't being taxed at source like a gross scheme. They are classed as a capital contribution the nett scheme. You do get taxed eventually buy not on full bik.

[fredgroves]

So on a net scheme you pay income tax and NIC (on the money you are about to use on a lease payment) and then still pay some BIK?

That's REALLY unattractive!

Definitely more expensive than a private lease!

[mcmaddy]

Depends which way you look at it. Most work schemes include maintenance where as private ones don't or when then do is expensive. You only pay the offset amount as bik not the full amount so your tax code is affected less. I agree though a private lease is the route I would go instead of any work based scheme.

[fredgroves]

I go crazy with a spreadsheet and compare total cost of ownership per annum, so lease company provided maintenance (and tyres) vs DIY are all in my projected figures along with a whole raft of other things.

There is no way that a net scheme would be worth touching IMHO.

In theory a large employers lease rates should be less than i can get by going out and doing it myself. Only they never actually are.

Just in the same way that my employer seems to pay many multiples more than I do for a single mobile phone contract.

It makes no sense, but that's my experience of their performance in terms of obtaining good prices on things. Its probably to do with the costs incurred in handling a large number of things on a contract and some sort of buggery with the accounting to spread the costs out (which of course they pay a premium for)

[mcmaddy]

I know certainly within local authority where I work the scheme is no where near as good as say the NHS scheme but we also have a co2 limit of 150. It seems a load of people are ordering these little 1.0 turbo petrol cars at the minute and they seem good value on our scheme.

[fredgroves]

Yeah I have a 130g/km limit on my scheme

The low emission vehicles were always a good way to avoid BIK, so good that the taxman got jealous and now they aren't any better than driving a V8.

Which is nice.

[Skye]

So I went back to NHS Fleet Solutions and again asked how the salary sacrifice scheme would be affected.
This is quite a business for the NHS bringing in considerable revenue. They also run the Home Electronics solutions and holidays.
I have now been told they are in negotiations with the "Government" departments and can't give any details. They hope the salary sacrifice scheme can continue. 
I have decided to wait and see regarding an order.
They continue to list cars. The GTD can be specced with out carbon grey or night blue but with options such as, parking, sunroof, voice commands and high beam comes in at £398. If you just lease as a salary deduction £582.
Standard GTD in pearl black, no options 2 year lease and ready now £368 or£530.
A GTI pearl black and parking pack £419 or £592.
No GTE or R available yet.
Passat GTE Sloon Advance. Pearl black no options £387 or £751.
A very tempting offer is the BMW 330e M Sport pretty nicely specced with M Sport plus Pack, heated seats and Sunroof £386 or £751.
All the above are for 12000 miles a year and apart from one 3 year leases.
Unless the Fleet Solutions can do a deal they will be screwed apart from the hybrid cars. I am sure there are better options out there.