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EV Salary Sacrifice


Posts: 8
Registered
Topic starter
(@wonkyfunk303)
Active Member
Joined: 8 years ago

Good morning, i was hoping someone could give some clear and concise advice. I currently plough a large amount into pension via salary sacrifice, I have the opportunity to have an EV under salary sacrifice, that would still give me a decent amount in my pension, the murky question is, how will it affect my maintenance? from reading i could get a slight increase due to the bik value (which would only be about 30 quid a month) under the 1% rate..... or will they take the whole value (about 640 a month)?

just curious as i really need a new vehicle and this could help me out as I am in dire need but could do without suddenly being slammed by cms.

 

thanks in advance 

2 Replies
Posts: 5366
(@dadmod2)
Illustrious Member
Joined: 6 years ago

hi,

I heard from many in this situation that CMS take benefit in kind into account, and people with company cars had to pay more maintenance due to receiving an allowance. I don't knkw what the amount will be.

I recommend you join this support group for paying parents:

https://www.facebook.com/groups/239699060076601/?ref=share

 

 

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Posts: 25
Registered
(@dushisbest)
Eminent Member
Joined: 1 month ago

Hello,

 

https://www.vavoomleasing.com/uploads/12-Vavoom%20-%20Salary%20sacrifice%20-%20Employee%20FAQs%20with%20LL%20+%20VIP%20insurances%20-%20June%202023.pdf

Page 13:

"Will participation in the Scheme have any impact on my child maintenance payments?
Child maintenance payments are calculated by reference to your taxable gross income, after any
pension contributions, and any salary sacrificed are taken in to account. The taxable value of your new
company car should not be included in the calculation, but the receiving parent may ask that it is
taken in to account as an 'additional income variation'.
If you join the Scheme your income for child maintenance purposes should decrease, and your child
maintenance payments may therefore be reduced as a result. For further information about child
maintenance payments please visit Gov.UK or see the Child Maintenance Service step-by step guide."

(If pension contributions are relived at source. The Gross weekly income is caculated from total Gross, then the weekly avrage of the peonsion contribution, is deducted prior to the maintance caculation. Once the CMS recive evidance of this type of contributions).

 

THE CMS CACULATE FROM A GROSS FIGURE, Taxes are irrelivant. The Bik (Benafit in kind) is a tax. Inclusion in the scheme becomes part of your contract of employment (Benafit recived as an employee, that is not pay), your tax code should be adjusted to account for this, and/or any other tax obligations. (There are wage slip exsamples in the link to help work out the caculation. (Around page 30 ish). (Bik caculation page 9).

Now, if the CMS consideres the slary sacrifce under variation. They "cannot" see that amount in the figures reported to or by HMRC. (THE SAME WITH NET PAY ARRANGMENT PENSION CONTRIBUTION, they are not reported to HMRC as part of your taxable income).

They have to legally make your aware of the requested change to your income. and give you 14 days to provide any evidance. From which they create a Gross income figure for you. (If you supply nothing, they make one up).

Your maintance caculation moves from an Historical income based caculation of liability. To a current income caculation. Meaning it is an approximated avrage, of what will be earned from the effective date (The date the Residential parent complained). To annual reveiw.

 

"This is why people who have "slary sacrifce" included as income by the CMS end up paying a higher amount".

 

I hope this is useful to you.

 

Good luck 

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