Company Car Scheme (Salary Sacrifice , Tusker) Vs Taking Car Allowance

Bounce

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Bounce

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Hi All,

So the company I work for has recently launched the new company car scheme, which is now Tusker and is offered via the salary sacrifice, which I understand saves on Tax and NI contributions. I am trying to weight up the options of what's best value for money.

The options I have are :-

Option 1 - Take the car allowance (£5,500 annual/£458.33 a month), then get my own car, but understand the £5,500 will be subject to normal tax and NI deductions, so in reality that £458.33 is more like £350 a month. Bearing in mind I have to get a car for that, Insure it, Tax it, MOT it every year and of course service it. Mileage claim back will be 45p per mile.

Option 2 - Take up the new company car scheme offered via Tusker, and receive a new company car, which includes all the usual expenses paid for which I will have to keep for 4 years, the only problem is some of the cars which are on offer on Tusker appear to be expensive?

Below screenshot is a Polestar 2 indictive cost effect on my take home pay.



Below screen shot is my current company car for comparison




I am expected to do business and personal mileage of around 16k-18k a year.

So is the new scheme better than the old scheme, or am I best taking option 1 and the car allowance?
 
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Tinders said:
That seems expensive. Im on a conventional company car scheme, and the Polestar 2 (LR 220KW SM) is costing me 247 all in, thats for 4 years 25k miles pa.

I didnt think Salary Sacrifice was technically a company car scheme, so it will be interesting to find out the differences.
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£247 a month?

They’ve marketed as the new company car scheme, I think they will give me my car allowance to put towards it. I don’t know how it works when you leave , the company I assume you give it back or pay some sort of termination fee?
 
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Im in the process of choosing my new car, I wont be going for the polestar as its too small for family duties!

Im looking at the Enyaq or model Y, the model Y is about the same monies as the Polestar and the Enyaq is huge bit cheaper! The EQB and EQA in both 250 and 350 variants are crazy cheap on our scheme. The Korean offerings are also fairly well prices. Im erring more towards the Enyaq Sportline, purely from a cost/kit and practicality POV. Model Y, i wanted to hate, but its a really good product, however it does give me a headache driving and the ride is shocking.
 
Tbh that does look pretty high for a polestar but as you're using salary sacrifice the 20% banding is having an impact. Checking on my own portal it's a pretty similar impact at 20% but drops to 450 net in the 40% band. I personally wouldn't dream of paying £550 for a polestar 2, despite liking them a lot.

It's a bit cheeky of the company to call a salary sacrifice scheme company car tbh (my company car and equivalents come in at different values to the net salary sacrifice scheme we also have access to - sometimes better sometimes worse) but maybe it doesn't particularly matter if it's all that's on offer.

We don't have anything under circa £350 per month, but sometimes it's surprising the models that are relatively "cheap" if searching on cost bands rather than specific models - are there any other alternatives?
 
I wouldn't consider a salary sacrifice scheme to be a 'company car scheme' even if it technically is from a tax perspective. Rather than just forgoing a potential allowance for a company provided car that you have no real ties to, you're sacrificing salary and signing up for a 4 year lease agreement on this scheme, which you will probably have greater personal financial ties to in the event of your circumstances or employment changing.

Amendments via salary sacrifice could reduce pension contributions and ours has sizeable termination fees (iirc up to 6 months worth of payments) if you leave for pretty much any other reason than redundancy.
 
Things to consider.

Do you actually want an EV?

What is your salary, therefor what tax band are you in. If in 20% band they are not that effective. These schemes can be very effective if you are in the child benefit claw back zone. Does it impact your pension (NHS employees have this issue)

However your BIK will be significantly reduced. So if you are wanting to be in a similar position it doesn’t look far off.

Can you buy or lease cheaper. There are some crazy cheep ICE and EV deals at the moment.

the difference in relative car cost is significant. MG HS vs Polestar 2 is £20-25k different! So not surprised it’s almost double the effective cost.

Most of these deals are all in, insurance, maintenance, tires and brake down. So factor that when considering the going my own way option.

Are there other options to a Polestar 2. A much cheaper option could be an MG4 for example. I don’t know what spec of Polestar 2 you have selected but the new RWD Tesla is a much nicer and cheeper car.

Edit: if your not set on EV, you could lease something like a Vauxhall Crossland or Citron C4 for about £300 per month with 1 month up front an a 20k miles 3 year lease
 
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crazyDAJT said:
Things to consider.

Do you actually want an EV?

What is your salary, therefor what tax band are you in. If in 20% band they are not that effective. These schemes can be very effective if you are in the child benefit claw back zone. Does it impact your pension (NHS employees have this issue)

However your BIK will be significantly reduced. So if you are wanting to be in a similar position it doesn’t look far off.

Can you buy or lease cheaper. There are some crazy cheep ICE and EV deals at the moment.

the difference in relative car cost is significant. MG HS vs Polestar 2 is £20-25k different! So not surprised it’s almost double the effective cost.

Most of these deals are all in, insurance, maintenance, tires and brake down. So factor that when considering the going my own way option.

Are there other options to a Polestar 2. A much cheaper option could be an MG4 for example. I don’t know what spec of Polestar 2 you have selected but the new RWD Tesla is a much nicer and cheeper car.

Edit: if your not set on EV, you could lease something like a Vauxhall Crossland or Citron C4 for about £300 per month with 1 month up front an a 20k miles 3 year lease
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Im on £45k base salary a year, plus 20% bonus a year. My salary is expected to increase next year to £50k . So right on the 40% tax band.

I’m not a big fan of EV personally.

How I understand it I am currently forfeiting £450 car allowance , so if I get that £450 towards the car via salary sacrifice , then the pole star will only effectively cost me £100
 
Bounce said:
Im on £45k base salary a year, plus 20% bonus a year. My salary is expected to increase next year to £50k . So right on the 40% tax band.

I’m not a big fan of EV personally.

How I understand it I am currently forfeiting £450 car allowance , so if I get that £450 towards the car via salary sacrifice , then the pole star will only effectively cost me £100
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Rember the whole lease cost of the car needs to be in the 40% band to be effective. If you are just hitting 40% it’s same as being a standard rate tax payer.

So salary + car allowance needs to be in the £60k+ range to get full benefit. Assuming £800 per month pre tax cost)

I would ignore your bonus, if it comes in it actually makes the car cheeper but ignore it for your calculations.

If you’re not sold on EV. Just go lease something on 3 year. I personally wouldn’t lease an EV on 4 year term as the technology is changing rapidly. So you may feel you are missing out on 3+ years as ranges / cost base may have moved on.
 
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Bounce said:
How I understand it I am currently forfeiting £450 car allowance , so if I get that £450 towards the car via salary sacrifice , then the pole star will only effectively cost me £100
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Not quite as you are mixing pre tax with post tax. The way to do it. jump on a tax calculator and compare.

Current position of no allowance and current BIK reduction to personal tax allowance.

Salary + allowance = take home - (post tax calc)
 
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