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I'm a non resident parent of 2 children paying maintenance under the CSA, Our case is due to to transfer to CMS by August 2017. I desperately need a new car and my employer which is an NHS trust is offering a car lease scheme and I have placed an order for a new car. This new car is entirely funded by myself out of my salary however it does get classed as a company car for tax purposes and from my understanding of how this works around 7000 per year will be removed from my tax free allowance via my tax code. I am now wondering if I am making the right choice as I have no idea how this will effect my maintenance payments when the new scheme comes into force.
At worst I can see that they will take my gross salary and add on the 7k as a taxable benefit which will raise my payments by around 20% even though this is actually not a benefit been provided to me as my employer is not contributing anything towards the cost of the car. Other possibilities are that as the payments I make towards the car are salary sacrificed they will take my new reduced gross pay and add on the 7k taxable benefit which will still result in an increase of around 5% as the BIK tax value is greater than the reduction in salary due to the high co2 of the car I am getting. Unfortunately having 4 children I need a 7 seat vehicle so picking a smaller car with lower CO2 isnt an option.
Best case they will take my reduced salary and not count the BIK value which will result in a 10% reduction but I carnt see this happening.
I'm considering cancelling the lease and just financing a car normally as its proving to be a can or worms as regards CMS and as it works a year in arrears by the time I know how it will affect me it will be too late to get rid of the car.
Has anyone else found themselves in a similar position with lease cars and know how this works?
any help or advice greatly appreciated.
I don't know enough about this except that I believe that the NHS car scheme is very generous. Is the money from your salary a salary sacrifice (ie it effectively reduces your salary), in which case, I think it will be ok. I would contact your union, if you are in one as I suspect they may have a dedicated finance helpline which will probably be able to clarify exactly what the position is.
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