NHS subsidised lease cars

chipperhead · 18 Apr 2012 at 15:52

My wife works for the NHS, we got a few quotes for a lease car and it was ridiculously expensive.

tezmo · 18 Apr 2012 at 15:55

Nope, there is no private fuel contribution - any business miles are claimed back.

In addition, I don't see why on earth you would have to pay the monthly amount *and* pay tax - you should only be liable for tax if you're getting a taxable benefit, which you're not doing if you're paying the lease.

chipperhead · 18 Apr 2012 at 15:58

tezmo said:
Nope, there is no private fuel contribution - any business miles are claimed back.

In addition, I don't see why on earth you would have to pay the monthly amount *and* pay tax - you should only be liable for tax if you're getting a taxable benefit, which you're not doing if you're paying the lease.

Yeah, when we had a quote the tax to pay was almost nothing.

TheDean · 18 Apr 2012 at 15:59

At our trust it's essentially pointless unless you are a field engineer and do above 12k business miles a year. They make a reasonable amount, otherwise you're better having your own car and getting the 57p a mile & the £50 a month thing...

TheCSSDoctor · 18 Apr 2012 at 16:00

I used to have a lease car up until last year when it was up and for me it worked out ridiculously cheap

Do you still get a contribution towards the car? We did, so for me, my total contribution including tax came to around £60 per month for a 1.9tdi Ibiza Sportrider which did me fine for the time I had it
At the time of getting my car, apparently the lease companies had a deal with BMW so the number of 1-series that appeared was ridiculous. A colleague had a 120d M-sport for less than £140 per month

andrewdodd13 · 18 Apr 2012 at 16:10

Peerzy said:
A 1.2L Polo comes in at nearly £17k

Sounds not far off of the 5-door 1.2L 105PS TSI if you spec it with some stuff.

tezmo · 18 Apr 2012 at 16:26

No contribution towards it, no - as daft as the numbers seem (to me) there doesnt really seem to be a consensus on whether they messed up or if its genuinely a bad deal. Either way we can all agree that £400+ a month for this car is kerazy. We are going to get back to the lady who did the quote and ask her w-t-f.

tezmo · 18 Apr 2012 at 16:55

Spoke to the lady again, and she has confirmed the correctness of the numbers!

She says there would be a monthly cost of £319.18, and a taxable liability of £87.68 (on which you'd be taxed at 20%). So it would come in altogether at £336.72 every month.

Am I daft or is that an awful lot of money for what you'd be getting?

Peerzy · 18 Apr 2012 at 16:57

tezmo said:
Spoke to the lady again, and she has confirmed the correctness of the numbers!

She says there would be a monthly cost of £319.18, and a taxable liability of £87.68 (on which you'd be taxed at 20%). So it would come in altogether at £336.72 every month.

Am I daft or is that an awful lot of money for what you'd be getting?

Massive, a personal hire thing requires a deposit for sure but £400~ gets you a Jag XF, 5 Series or similar doesn't it!?

kefkef · 18 Apr 2012 at 17:02

It does seem a lot of money, especially when you figure you will get a reduced rate mileage also. Don't forget though that this includes insurance, road tax, replacement tyres, servicing etc etc which is why it's still a taxable benefit.

We are being moved from lease to salary sacrifice, seems a better scheme overall, but still not suitable for me just yet.

bJN · 18 Apr 2012 at 17:02

That looks insanely overpriced.

Just looking at some of the leasing deals I can see through the main NHS Discount site...

3dr version has the P11D at around £14.7k. The amount you've been quoted could be dependent on the length of the lease though?

tezmo · 18 Apr 2012 at 17:08

Just taking all your comments in....for clarity we are talking a 3 year arrangement.

kefkef · 18 Apr 2012 at 17:09

Checked the salary sacrifice scheme and:

Volkswagen Golf Hatch 3Dr 1.2TSI 105 EU5 S 6Spd £322.13 (edit. Noticed I quoted golf, the polo is £292.00)

Though you usually get full mileage rates for that compared to a lease scheme. Ask the woman if there are any offers on certain makes or models, for example a Seat on salary scheme is:

SEAT Ibiza Sport Coupe 3Dr Sport Coupe 1.2TSi 105 EU5 FR £233.23

tezmo · 18 Apr 2012 at 17:13

thank you kefkef - are you getting those salary sacrifice example numbers from a publicly available resource?

kefkef · 18 Apr 2012 at 17:27

My trust is now using cpcdrive.nhs.uk

tezmo · 18 Apr 2012 at 17:33

thank you again - shall see if the OH can register on there and/or give them a call.

kefkef · 18 Apr 2012 at 17:46

It works out ok on the salary sacrifice scheme, as if you take that car, the money is taken before tax as fox mentions previously, and you get taxed on the emissions, but you are still able to claim the regular user allowance of £52 a month and also then claim mileage back at 35p per mile for business miles. Whereas with the lease scheme you lose the regular user allowance and also only get something like 10p per mile for business miles and have to sort out claiming the rest back at the end of the year through the scheme or from the tax man.

Lots of folks at our place are fuming as it came out of the blue without warning, so some people had already ordered a lease car and would have been far better off in this new scheme but are stuck with it now!

Peerzy · 19 Apr 2012 at 07:22

kefkef said:
It works out ok on the salary sacrifice scheme, as if you take that car, the money is taken before tax as fox mentions previously, and you get taxed on the emissions, but you are still able to claim the regular user allowance of £52 a month and also then claim mileage back at 35p per mile for business miles. Whereas with the lease scheme you lose the regular user allowance and also only get something like 10p per mile for business miles and have to sort out claiming the rest back at the end of the year through the scheme or from the tax man.

Lots of folks at our place are fuming as it came out of the blue without warning, so some people had already ordered a lease car and would have been far better off in this new scheme but are stuck with it now!

Can't they reject the car?

I'm just taking a wild guess but it's a financial agreement so don't you get the cooling off period in which you can cancel without penalty?

Ev0 · 19 Apr 2012 at 09:13

tezmo said:
Nope, there is no private fuel contribution - any business miles are claimed back.

In addition, I don't see why on earth you would have to pay the monthly amount *and* pay tax - you should only be liable for tax if you're getting a taxable benefit, which you're not doing if you're paying the lease.

Generally companies do these schemes as a salary sacrifice, so if this is run as one of those the monthly lease cost is taken out of your pay before tax and NI.

As you're getting a taxable benefit out of it and not paying income tax on that money you're liable for company car tax and hence have to pay that. The government want their pound of flesh one way or another

So depending on how they present the numbers to you that 319.98 could be the pre tax cost, so the actual cost to you of 319.98 minus the tax and NI you'd pay on that if it was just paid to you as cash, depending on tax band you're in.

*edit* what kefkef said really, you guys know more about your specific schemes

(damn me for not reading the last few posts before posting

)

kefkef · 19 Apr 2012 at 11:41

Peerzy said:
Can't they reject the car?

I'm just taking a wild guess but it's a financial agreement so don't you get the cooling off period in which you can cancel without penalty?

Once they have ordered the car the agreement is signed, so to break the agreement they have to pay the 1st year surrender value which is usually partial payment of the first years monthly commitments.