Salary Sacrifice Scheme
The salary sacrifice scheme is when you ‘sacrifice’ part of your salary in order to receive benefits from your employer, such as child care vouchers, additional pension and company car contributions. The idea behind this for many employees is your overall pay will be lower thus you will pay lower tax, and national insurance.
What to consider with salary sacrifice
You may be saving money in paying tax and national insurance because you are earning less, however this can have a negative effect when applying for credit elsewhere. For example, if you are looking to get a mortgage, the lenders will be looking at your income, which will be less due to the salary sacrifice scheme.
Which benefits are available in a salary sacrifice scheme?
All benefits need to be tax free, for example-
- Cycle to work schemes
- Childcare vouchers
- Car parking
- Additional pension contributions by your employer
- Company Cars
Changes to the salary sacrifice scheme
In April 2017 the government announced that income tax advantages for some of the benefits will end, this included company cars
What to do if you have bad credit and your salary sacrifice scheme is no longer an option for you?
At UltraCar we understand the difficulties of getting a vehicle on lease when your credit rating is less than perfect.
We also understand that this may not be something that you wish your employers to be aware of. Our underwriters will be looking at your bank statements to check on affordability, if you have been in a salary sacrifice scheme then your income will not be a true reflection of your earnings.
Do not worry, at Ultracar we look at each application individually. When you make your application make us aware that you were previously in a scheme, and supply wage slips to show the amount that was being deducted.
Indicate to us when the deductions will cease, and our underwriters will have a better understanding of your affordability per month.
Take a look at some example cars and prices here
Get in touch with us today, and discuss your leasing options with our friendly team.