CMS and Salary Sacrifice schemes

[Daffodils2023]

Hi, can anyone help me on the tax efficient savings that companies offer their employees, particulary Car Salary Sacrifice? The reason I'm asking is my ex has a Salary Package of £85k but the Child Maintenance Service are only taking into consideration £71k, they apparently get their figures direct from HMRC so I am trying to work out if it is the Car Salary Sacrifice which is bringing down the taxable income figure with HMRC. He works for a large company on payroll so there isn't any self-assessment. All I can think of is that it is the Car that is billed on the Companies benefits blurb as being a "tax efficient savings scheme"..... Anyone up on tax and can understand whether this is what is happening here?

[Thislife1]

Yes, this sounds like salary sacrifice. Your gross salary is reduced by the amount of the benefit - in this case the car payment - which your employer pays directly on your behalf. The lower salary is reported HMRC which reduces the amount of tax you pay.

[VeggieSalsa]

This may be the case if it’s an electric car. Any other sort of car would be taxable either as salary sacrificed for non allowable purposes, or as a benefit.. but the benefit may not be taken into account for CMS.

[Daffodils2023]

Yes its an Electric car (£68k worth of car).

[Daffodils2023]

@VeggieSalsa Do you mean its because its an electric car its not taken into account for tax purposes? Do you know what that scheme is called? I feel like I'm having to educate CMS on something surely they should know about as another way men opt out of paying for their children

[VeggieSalsa]

@Daffodils2023

@VeggieSalsa Do you mean its because its an electric car its not taken into account for tax purposes? Do you know what that scheme is called? I feel like I'm having to educate CMS on something surely they should know about as another way men opt out of paying for their children

If you salary sacrifice for an electric car it reduces your taxable salary, the same way a pension contribution would so the taxable salary reported to HMRC is lower.

It is just called salary sacrifice.

It is a legitimate and cost effective way of getting a car though, but I don’t know enough about CMS to know whether they look at gross salary, taxable income, adjusted net income etc etc

[DrMarciaFieldstone]

@Daffodils2023

@VeggieSalsa Do you mean its because its an electric car its not taken into account for tax purposes? Do you know what that scheme is called? I feel like I'm having to educate CMS on something surely they should know about as another way men opt out of paying for their children

If it’s taken off at source like pension contributions, CMS won’t look at it.

[ToBMarried24]

Getting CMS on 71k would be a fair chunk.

It is just pure greed.

[taxpayer1]

But the law is on his side as you have already found out. CMS is based on taxable income. The maintenance on 71k is many hundreds of pounds a month so I would say it is pure greed. Better get a better job yourself and improve your prospects as your ex did.

[DrMarciaFieldstone]

This won’t be considered diversion of income, they’re legal schemes.

He has two dependents if he has children he’s paying maintenance for. I’m

[Daffodils2023]

hahaha and so they carry on
@taxpayer1 & @ToBMarried24 I wasn't asking your opinion on the ethics of me asking this question. I have no idea how this is greed on my part anyway, its such a bizarre concept, this money is for children. Are you men, or women, in this situation by any chance? haha. He was paying X per month, and then all of a sudden he was paying a very reduced amount, in the same job with a pay rise, large bonus and a swanky brand new electric car. This is diversion of income billed as a "tax efficient saving" by the company, all I am asking for is that HMRC take this into account. They are currently not, as various posters, who appear to know what they're talking about have clarified. This man does not see or look after his children in any way. In this country the law is that you have 50% responsibility for your children. The Law, not my greed. When we are also currently running at over 6 months of unpaid as well, on top of numerous court appearances etc etc. Might I suggest you read up and educate yourself on domestic abuse and spefically finacial abuse before you randomly comment on posts from people who are NOT ASKING YOUR OPINION, but instead factual information. Thanks so much. Get a life and reflect on yourselves. I suggest you can't have children, or know how much it costs to separate from an abusive man.
@taxpayer1 I have a job and despite the years of abuse and separation from this man have also "bettered myself" (how incredibly patronising!!!) at the same time. This man has not bettered himself, he is a charlatan who lies and cheats his way through life, he stole from me as well as all the other extras that come with serious financial abuse. Don't waste your time commenting unless you fully understand something. Pointless. Waste. Of. Time.
@DrMarciaFieldstone they are not dependents that he drives around in his brand new very expensive and large car, he does not see his children.

[Daffodils2023]

@DrMarciaFieldstone it wasn't a question of whether it is legal or not, I wasn't suggesting it wasn't, I was trying to understand why CMS are not looking at the full salary package

[BanditsOnTheHorizon]

The money for the car will be taken out of his salary 'before' tax, the electric scheme where I work is how this is done. It's an incentive for people to lease an electric car.

As for HMRC and CM, they will look at his P60 which will have his full salary on it. He gets a benefit by not paying tax on the monthly amount for the car, but the figure used for CM is his full salary - this is my take on it from previous experience

[Daffodils2023]

hahahaha @taxpayer1 get a life, I am the furthest from greed than you can ever know. Responsibility and the law on the other hand are both close to my heart. I suspect you have had a bad experience from a woman, or a man, which is why you are accusing me of greed and jealousy... hahahaha I don't have a car out of choice, its not necessary to my life, and I'd rather my children had a planet to live on when they grow up. Hahahahaha, seriously, get a life. I did not ask your opionion. I asked for factual information. Haven't you got anything better to do than troll random people on random public forums?? so sad.

[BanditsOnTheHorizon]

To add to my post, any pension contributions, both out of his salary and into a personal pension ARE taken out of his salary for CM purposes. So if he's paying in £250 from his salary into a work place pensions, and £250 into a private one direct from his bank account, £500 a month, so £6000 a year, will be removed from the calculations for CM

[ImANameChanger01]

@Daffodils2023 you can go into your CMS portal and ask them to do a variation of income calculation. Let them know his salary and that car is salary sacrifice and they can recalculate based on his real income. BUT they usually ask for evidence so give as much info as possible, otherwise they will just decline the request (because they don’t seem to be bothered to fact find them selves)

[Catchasingmewithspiders]

How does CMS work because the amount my ex needs to pay has gone down and I'm not sure why does not equal greedy and jealous. That's some pretty big assumptions you have made.

[taxpayer1]

@Catchasingmewithspiders

How does CMS work because the amount my ex needs to pay has gone down and I'm not sure why does not equal greedy and jealous. That's some pretty big assumptions you have made.

Glad that you ask instead of branding everyone a troll. EV do pay taxes over a low value. That is reported as BIK. The current BIK for EV is 2 Percent.

[Catchasingmewithspiders]

@taxpayer1

Glad that you ask instead of branding everyone a troll. EV do pay taxes over a low value. That is reported as BIK. The current BIK for EV is 2 Percent.

I didn't ask