Car Lease - Employee Perk

[LKS]

I currently have a car on a lease scheme through my current employer, which by luck, comes to an end this July.

I am awaiting to start within the railways with a TOC, so not looking to restart a new contract with current lease as if a position came up quickly, then I would have to pay an out of contract fee, so have a plan currently in place.

But I did wonder, do TOCS have employee perks (if it's called that, more of a benefit in kind) like car lease schemes. I know cycle to work scheme is one.

 

[Bedwyn32]

My TOC (SWR) don't have anything like that.

 

[whoosh]

There are various discounted deals we can get where I work through a 'discount hub', BUT these are NOT a 'salary sacrifice' arrangement, which I suspect is what you have?

DB Cargo did have a salary sacrifice scheme for cars but I don't know if its still the case. London Underground are looking into doing one for electric cars in the future, but have nothing at the moment.

I'm not aware of any other TOC having a salary sacrifice arrangement for car leasing.

Mine does, (and I think others do aswell) have a 'Cycle to work' scheme though (My TOC is once a year)!

 

[anglian96]

My old employer used to do this and it comes out " before tax " apparently saving you money. But what they didn't tell you is your tax code changes and then at the end of year you'd get a nice letter saying you owe us so really what you were saving your paying back anyway ..... Not worth it at all and also the prices on the scheme were alot higher than if you went in and got it yourself. An example of this was a basic standard fiesta was near on £600 a month haha. If you wanted a high end mercedes/BMW etc you was looking at £1200/£1300 a month. Oh and just to add when you hand the car back they look at it in fine detail and even wear and tear stuff you'll get charged for. £100 per rim and things like that

 

[Ducatist4]

It'll also reduce your pension contributions which might be significant come retirement time.

 

[156421]

My old employer used to do this and it comes out " before tax " apparently saving you money. But what they didn't tell you is your tax code changes and then at the end of year you'd get a nice letter saying you owe us so really what you were saving your paying back anyway ..... Not worth it at all and also the prices on the scheme were alot higher than if you went in and got it yourself. An example of this was a basic standard fiesta was near on £600 a month haha. If you wanted a high end mercedes/BMW etc you was looking at £1200/£1300 a month. Oh and just to add when you hand the car back they look at it in fine detail and even wear and tear stuff you'll get charged for. £100 per rim and things like that

Plus... there are often annual mileage limits with hefty per mile charges for anything in excess of that.

 

[Donny Dave]

If/when you start with a TOC and join a union, it may be worth your while seeing what benefits and perks the union offers as well.

 

[LKS]

Thanks all

There are various discounted deals we can get where I work through a 'discount hub', BUT these are NOT a 'salary sacrifice' arrangement, which I suspect is what you have?

DB Cargo did have a salary sacrifice scheme for cars but I don't know if its still the case. London Underground are looking into doing one for electric cars in the future, but have nothing at the moment.

I'm not aware of any other TOC having a salary sacrifice arrangement for car leasing.

Mine does, (and I think others do aswell) have a 'Cycle to work' scheme though (My TOC is once a year)!

Yes that is what I have. It comes out before Tax/NI which is where the "saving" happens.

My old employer used to do this and it comes out " before tax " apparently saving you money. But what they didn't tell you is your tax code changes and then at the end of year you'd get a nice letter saying you owe us so really what you were saving your paying back anyway ..... Not worth it at all and also the prices on the scheme were alot higher than if you went in and got it yourself. An example of this was a basic standard fiesta was near on £600 a month haha. If you wanted a high end mercedes/BMW etc you was looking at £1200/£1300 a month. Oh and just to add when you hand the car back they look at it in fine detail and even wear and tear stuff you'll get charged for. £100 per rim and things like that

I have to say that so far I'm quite lucky and happy with my lease. Had no issues so far with any tax owed etc. I got a brand new Audi E-tron (which at time came with the home charger) and pay less than £600 a month. The car was a £70k car when it was released.

But I am aware they are going to go through it deeply when they take it back end of July, and look for anything they can claim will be outside wear and tear. I have the guide which they have to work to, Im just hoping that we've looked after it enough.

It'll also reduce your pension contributions which might be significant come retirement time.

You're right. It does do this, however, I am also a sceptical person, and live for now, later may never come. I've dealt with too many people that are dying in 40s/50s to make me consider the retirement age and if I'll actually make it...

If/when you start with a TOC and join a union, it may be worth your while seeing what benefits and perks the union offers as well.

I presume the main go to union is ASLEF? Do people also do RMT? (I'll be a driver if that helps).

 

[Ducatist4]

Its very easy to think like that - I'm working with lots of people who are retiring at 60 with a lump sum and a nice pension to see them though till they die. The most important time to be paying into a pension is when you are young as that means the money is in there the longest time so does the most work. I certainly regret not doing more about it when i was younger.

 

[Gemz91]

If/when you start with a TOC and join a union, it may be worth your while seeing what benefits and perks the union offers as well.

Do RMT or ASLEF offer this? I haven’t heard of anything.

 

[Donny Dave]

Do RMT or ASLEF offer this? I haven’t heard of anything.

Sorry, I should have worded my previous post better. While ASLEF and RMT will offer certain perks and benefits, I suspect that they will instead be partnered with a hire/leasing company that will offer members with discounted rates on vehicles.

I know Usdaw used to do this.

 

[MalaiseForever]

Network Rail pay a car allowance to Band 2s and above. Though really this is a just a way of increasing salaries by £x rather than anything to do with cars.

 

[43066]

Sorry, I should have worded my previous post better. While ASLEF and RMT will offer certain perks and benefits, I suspect that they will instead be partnered with a hire/leasing company that will offer members with discounted rates on vehicles.

I know Usdaw used to do this.

I’ve never heard of either ASLEF or the RMT doing this.

== Doublepost prevention - post automatically merged: 3 Jun 2024 ==

I presume the main go to union is ASLEF? Do people also do RMT? (I'll be a driver if that helps).

As a new entrant to the railway who comes in as a driver it would make most sense to join ASLEF, who represent the overwhelming majority of the grade. There are some drivers in the RMT but generally only where they’ve previously been a guard, or have fallen out with their local ASLEF reps and decided to leave the union!

 

[Tazi Hupefi]

No TOCs offer this as far as I know, although some do have allegedly preferential rates/small discounts from certain dealerships as part of their wider discount package. Most TOCs are trying to move away from anything that complicates their payroll or increases their administrative effort.

This whole area is pretty complicated from a tax perspective too - lots of companies get this wrong and HMRC eventually catches up with the employee, sometimes years down the line. Make sure your existing lease has been declared on your P11D each year or you'll get a surprise bill in the future.

 

[EZJ]

I currently have a car on a lease scheme through my current employer, which by luck, comes to an end this July.

I am awaiting to start within the railways with a TOC, so not looking to restart a new contract with current lease as if a position came up quickly, then I would have to pay an out of contract fee, so have a plan currently in place.

But I did wonder, do TOCS have employee perks (if it's called that, more of a benefit in kind) like car lease schemes. I know cycle to work scheme is one.

Northern certainly do this as I know a fair few who have used the scheme. TPE are also just about to start one as well. Both companies will be using a lease company called Tuskers. From what I've seen some reasonable deals on some cars but as always you should do a full comparison to make sure it's right for you. Tuskers offer a full service so the car, road tax,servicing,insurance and tyres are all in the total price.

 

[Tazi Hupefi]

That seems absolutely crazy if correct, anyone in the railway pension scheme should seek very careful advice from an independent advisor before subscribing to a service like that as it could cause you to miss out on £thousands in pension contributions, unless (and is very unlikely), that Northern makes up the shortfall.

Essentially if your real salary is £30,000 - they artificially lower it to say £25,000 - giving the £5000 to the car company - therefore you pay income tax/national insurance only on the lower £25k amount. Northern makes a saving too by paying less employer NI.

Some vehicles will incur a Benefit in Kind tax (P11D) on top of this.

(Figures totally not representative but merely to illustrate the scheme simply).

However, it also means that your railway pension contributions are also only made as a % of the lower amount.

 

[Ducatist4]

That's exactly what it means. The first scheme of this kind was the Cycle To Work Scheme which was more successful as the top limit was only £1k (its increased now though) so it didn't have a such a big potential impact.

 

[Train_manager]

Some vehicles will incur a Benefit in Kind tax (P11D) on top of this.

(Figures totally not representative but merely to illustrate the scheme simply).

However, it also means that your railway pension contributions are also only made as a % of the lower amount.

All salary sacrifice leased vehicles will incur BIK tax. They should be reported on your P11D as you stated.

== Doublepost prevention - post automatically merged: 3 Jun 2024 ==

There are various discounted deals we can get where I work through a 'discount hub', BUT these are NOT a 'salary sacrifice' arrangement, which I suspect is what you have?

DB Cargo did have a salary sacrifice scheme for cars but I don't know if its still the case. London Underground are looking into doing one for electric cars in the future, but have nothing at the moment.

I'm not aware of any other TOC having a salary sacrifice arrangement for car leasing.

Mine does, (and I think others do aswell) have a 'Cycle to work' scheme though (My TOC is once a year)!

According to my friend, DB cargo's car scheme is now closed.

 

[Haru]

Freight liner offers a car salary sacrifice scheme via Tusker, I know First group TOC doesn’t offer it.

It’s nothing new in terms of the scheme as most major companies offer it including the NHS. The savings come from tax as it’s taken from gross pay and NI and the company saves on NI and pension contributions, it’s only a maximum of four years per vehicle so unless you keep going for 30 years I do not see a problem with drastically reduced pension.

It is also like a lease so they will expect the car to be in a reasonable conditions, the guidelines are on BVRLA and are not as strict as people make it out to be.

 

[Gemz91]

That seems absolutely crazy if correct, anyone in the railway pension scheme should seek very careful advice from an independent advisor before subscribing to a service like that as it could cause you to miss out on £thousands in pension contributions, unless (and is very unlikely), that Northern makes up the shortfall.

Essentially if your real salary is £30,000 - they artificially lower it to say £25,000 - giving the £5000 to the car company - therefore you pay income tax/national insurance only on the lower £25k amount. Northern makes a saving too by paying less employer NI.

Some vehicles will incur a Benefit in Kind tax (P11D) on top of this.

(Figures totally not representative but merely to illustrate the scheme simply).

However, it also means that your railway pension contributions are also only made as a % of the lower amount.

I’ll be the first admit I don’t understand pensions. I pay into my pension and that’s as far as I understand. If I was to get a theoretical car on a car lease scheme through work, paying say £400 a month. How much would that effect my pension when I retire in 20 years time?

 

[Train_manager]

I’ll be the first admit I don’t understand pensions. I pay into my pension and that’s as far as I understand. If I was to get a theoretical car on a car lease scheme through work, paying say £400 a month. How much would that effect my pension when I retire in 20 years time?

You would need to speak with a pensions advisor. There are to many variables to answer your question.