Most people are familiar with the idea of a salary sacrifice car - an arrangement where you give up part of your salary in exchange for a company car. Salary Sacrifice Cars - how do they work, and are they worth it? Here's how it works: you agree to have a portion of your salary, which depends on the option you choose and for what item, deducted from your paycheck before tax. In exchange, you get to use a company car for business or personal use.
The amount of money you sacrifice is based on the value of the car, which is determined by its make, model, and engine size.
The amount of money you sacrifice is deducted from your taxable income, so you pay less tax. The amount you save on tax depends on your marginal tax rate - the rate of tax you pay on the next pound you earn. Essentially, you have less of an income so you pay less tax.
There are a number of different types of cars that are available through salary sacrifice. Typically, these are company cars with lower emissions than you would find elsewhere. You can choose from a range of car makes and models, so you can find the perfect car for your needs.
The switch to electric cars is a no-brainer when it comes to salary sacrifice vehicles. Not only do you get to use a company car, but you're also doing your part for the environment. Electric cars are the future, and by making the switch you're ensuring that you're ahead of the curve.
Leasing a car is another option that's available through salary sacrifice. This involves renting a car from the company for a set period of time, typically between two and four years. At the end of the lease, you can choose to buy the car or hand it back. Leasing a car is a great option if you don't want the hassle of owning a car outright. You don't have to worry about depreciation or selling the car at the end of the lease. You also get to drive a brand new car every few years. Which is better for you - salary sacrifice or leasing? It depends on your needs and what you're looking for. If you want the convenience of a company car and you're looking to go electric, then salary sacrifice is the way to go. If you want to lease a new car every few years, then that's also an option. Talk to your accountant or financial advisor to see what's best for you.