[Solved] CMS and salary sacrifice

If it is a salary sacrifice scheme, then these payments would be removed from your wages before tax, and therefore the HMRC would not know about this and it would not appear on your taxable income.

So in essence your wages would reduce by the amount you pay for the car each month. this would mean that if you were with the CMS, your assessed pay would be lower.

I have to disagree with Yoda94 - the NHS car scheme (which, as I understand it is a leasing scheme, and may make you liable for a company car benefit, so check this) is a sacrifice from Net salary, whereas salary sacrifice pension schemes are from gross salary. So for this car scheme, CMS will still be aware of your net salary before salary sacrifice and I think you will be assessed on this.

However, looking at the NHS car scheme, it included servicing and insurance, and there's no up-front cost, so I would say it's definitely worth considering, irrespective of the CMS affect.

Apologies, was not aware of the specifics of this scheme,

Many thanks to you both for the information. Unless the scheme is joined I'm unlikely to conclusively know. (I have also sent CMS a secure message, but won't hold my breath for any answer of any sort)

As pointed out, the scene does include all the servicing, insurances, breakdown, tax etc so is in effect just add fuel. I could save up to £50 a month on fuel alone.

Edit..
Whilst typing the above had a quick scan of the policy for my workplace.
"employment law rules allow you to give up an amount of your gross (before tax) wage or salary - a procedure that is known as salary sacrifice. This means that you do not have to pay tax, pension or NI contributions on the amount you give up"

"the trust then provides you with a car on which you pay tax as benefit in kind"

"although the contractual salary will be reduced for the amount paid via the sacrifice scheme, any annual pay increase and benefits will be based on the same salary known as basic pay (contractual pay before any sacrifice). Entering into a salary sacrifice arrangement will not affect your basic pay or other salary related payments such as bonus, overtime or pay awards "

Not sure if the statements above make this any more clear, doesn't to me.

Thank you again

So if you pay tax on this this will be added to your annual tax amount. For example, if you are a 20% taxpayer and you pay £2000 tax for this benefit over the year, the HMRC will assume that you earn £10k extra (20% tax on £10k is £2k) so this will be added to your CMS assesment.

Thats why it is so unfair on those that have a company car, they are assessed as earning all that extra but don't see it in a cash value. Complete rip off.

Does the NHS have a "captive" financial adviser? If so, I'd definitely make use of the service for this.

Hi all

sorry new to the site and was browsing this, I am about to undertake mediation with a preempt to starting divorce proceedings.

I have just taken a company car with a view to selling my own car to pay off some joint debts within the marriage, that aside I just wanted to pick up on one of the comments that says that the company car scheme wouldn't be the best option for me as the salary sacrifice isn't taken into account in real terms . If this is the case I can return the company car and keep my own car, I would rather do this than sell it than then realize I am going to be out of pocket and need to buy another one.

I would take professional financial advice on this as to whether it's worth doing this. Certainly the salary equivalent of the company car is included in the CMS calculation - I would definitely use CMS for child maintenance before starting the divorce proceedings, or at least the financial side of it, if you agree to anything in the divorce for child maintenance, the CMS can override this after 12 months, so if you've agreed a lump sum instead of child maintenance, then you lose out. There are tax considerations to consider with a company car, as well as child maintenance, so you need to be aware of the pros and cons of swapping salary for a company car.

Many thanks for all your advice.

CMS called me last night to help with the query, I sent before new year.

Was a pleasant call, explained i have a current sal sac scheme (childcare) and also thinking about the car.
After being on hold for some time, the advice was that the calculation IS based on the NEW gross AFTER salary sacrifice deductions (and after the pension as standard).

However if I opted for the car scheme (and continued with the childcare) the HMRC latest tax year (2017-2018) figure will be used at next annual assessment, unless the difference is 25% or more (which i don't believe it will be).

This process I think is a bit backward as upon the assessment, they use a figure which will see my weekly payments increase slightly, but in effect, i'll be earning much less. Once this is visible on a future tax (assume on the 2019-2020 statement) year circumstances may have changed.

Anyway, I think i found the conclusive answer to my question and hope it helps others

Thanks for posting that back here. I would recommend asking if you can have that in writing from them - would be worth it in case they change their mind.

No problem at all.
Funnily enough, although nothing in writing, I record all my mobile calls, just in case