Would you give the car back?

[DoofusMcXmas1]

In March this year I took delivery of a brand new car. The car was ordered through a salary sacrifice scheme at work. DP and I had discussed getting a car on the scheme for over a year, worked out financials (or so we thought) as being no worse off than we were before then as we were paying nursery fees via salary sacrifice. My car was due an MOT in April and we knew there was no way it was going to pass without costing more than the car was worth, it seemed like a no brainer. We are both discharged bankrupts so finance was not an option either.

I have to say it is the worst thing I have ever done. What they don't tell you is that the HMRC adjusts your tax code and, despite being salary sacrifice, it's classed as a company car. This car is costing a ridiculous amount of money. I'm being taxed through the nose so, with the cost of the car, I'm losing £500 per month. To put it into perspective, my gross pay 25/10 was £1850....I took home £1000 by 26/10 I was in minus figures with a week until DP gets paid. I'm working stupid shifts for, what seems like, not a lot of benefit. We are in a dire financial situation, we have next to no food and there are bills bouncing left, right and centre (this has not been helped by the fact it was dsd's birthday 25/10 and we spent £80 on her birthday shopping and lunch....again bad planning, we just haven't had the money to buy presents in the months leading up to it so did it on pay day) and it's starting to spiral out of control.

I spoke to the company and it is possible to give the car back but it will cost £2200. At the moment I have no idea whether it will be possible to pay that back in installments as the 2 people I need to speak to within the trust to ask are both on annual leave but it appears that the trust are invoiced for the exit fee and then recoup the money from me.

Would you give the car back? I don't see how I can sustain this level of poverty for another 2 years

Just did some reading and yes the NHS is misleading but correct.
If you google South West NHS salary sacrifice scheme there's a brochure you can download. Its pdf but I can't get it to upload on here. The wording is very ambiguous to say the least.
I'd go to a union or CAB to see what you're options are

BTW I really believe this is the next PPI scandal in the making. Let's hope it gets stopped.

What is your annual gross pay? Is it above the tax free threshold? By how much? This is very important to work out if you are worse off or not.

Yes Blue mis sold is the key and it's disgraceful. Clearly a deal has been done.

Pirate radio twitter ????

This is a good link to check what you're actually paying comcar.co.uk/taxtools/salarysacrifice/

gourmet I can guarantee you that I am approx £500 pm worse off, there is no trying to figure it out. I was lead to believe I would not be that much worse off, bar the cost of the car, I feel very mis-lead

I may have a word with my union, see if they could help me out. This level of 'living' is dreadful and I feel like such a failure.

RUBBISH YOU ARE AN EXPERIENCED A&E NURSE YOU ARE NOT A FAILURE.
Christ is this how the NHS treats it's qualified staff ???????????

I got burned by this a long time ago (different employer). Not only did my tax code drop dramatically to practically 00 my husband ended up paying extra tax because of it too. My colleague had opted for a high end sporty model and her husband's tax bill was horrendous. The company was extremely generous at Christmas time. That too was taxed as it was seen as a benefit.

But the adjustment to your tax code should cost you only about £45 a month . If they deducted more last month for the first time was it catching up the period since April? What is the monthly lease payment? Presumably you previously had car running costs and insurance that came out of your take home pay. If you had bought/leased a car yourself would that have cost you more or less?

My employer does a salary sacrifice for cars scheme.
They are popular with employers because it reduces gross pay by the amount sacrificed so that the employer pays less national insurance and pension contributions.
They are popular with staff as they can get a new car with all costs paid for a monthly fee.
However there are a lot of drawbacks to this scheme which employers and the car lease providers should make clear to anyone thinking of taking up a lease.
Firstly it is true it is classified as a company car- it's the Hmrc rules mad as it seems. This is because it is provided as part of your employment even though you pay for it. This should be in the t&cs of the scheme.
You should also have been informed of the p11d value of the car which is the value that affects your tax code.
So for every £100 gross lease payment you actually pay £80 or £60 if you're a higher rate tax payer. This saving should be more than your reduction in tax code though but it will depend on the cars emissions.
In my employers the cars available are limited to low carbon cars so generally small and cheap (ish) if you don't have a lot of extras.
Secondly you should have had an affordability calculation done as a salary sacrifice payment shouldn't reduce your pay below the national minimum wage.

Did they do this for you?

However this doesn't relate to the increases in your tax code which is done separately.

The rules of the scheme is that you must pay an early termination fee if you hand the car back before the end of the lease period.
This will also have been in the rules of the scheme and laid out in the T&Cs.

What type of car do you have to be costing you that much.

In my experience the cost of these schemes is more than the dealers schemes but they are attractive if you have a poor credit rating or if you are a higher rate tax payer.

Go back and read your contract and documentation and t&cs and check exactly what they say.
You may have some grounds for cancelling the arrangement IF the documents don't give you all the relevant info.

bert do you work in payroll? You seem to have good knowledge of this, better than any of the several thousands of people I've spoken to about this.

doof The NHS is definitely saving money extract from the cfc drive site

"We’re on a mission to help organisations be more productive through happier employees.

We do this by offering a ground-breaking car benefit scheme.

It means employees get a brand new car, save money on the tax they pay and don't have to worry about the hassles and extra expense of running a car (from MOTs to insurance).
What you get are happier employees. Plus you can save an average of £700 every year in employer National Insurance Contributions per car."

No not payroll - finance.

Is there a kick back for companies/organisations who use this scheme? Must be very lucrative for providers to have access to such a huge (and mostly low risk) market.

We’re on a mission to help organisations be more productive through happier employees.

We do this by offering a ground-breaking car benefit scheme.

It means employees get a brand new car, save money on the tax they pay and don't have to worry about the hassles and extra expense of running a car (from MOTs to insurance).

What you get are happier employees. Plus you can save an average of £700 every year in employer National Insurance Contributions per car.

The employers save quite a bit in pensions and NI particularly in public sector where employer pension contributions are quite costly due to the deficits in the schemes.
Also it actually reduces your pensionable pay so it can make a difference to your pension income when you retire,

I don't think the providers get any kick backs as such.

It's very lucrative for the providers though as they can bulk buy cars through fleet deals and also bulk buy insurance aa servicing etc.
The employers pay their invoices and then deduct from employee pay, do the provider has very low risk of defaults as well.

The tax man has caught onto this though and is looking at these schemes as it reduces the tax income to the government,