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Posted Thu, 02 May 2024 15:54:40 GMT by K Shah
Hello there! I would like to inquire about the employee electric car salary sacrifice. If the company wants to offer the electric car to the employee through the salary sacrifice scheme, how should we handle this matter? Do we need to register with HMRC for this? Also, do we need to declare this under P11D? Thanks,
Posted Tue, 07 May 2024 10:23:33 GMT by HMRC Admin 8
You do not need to register to operate a salary sacrafice, the benefit would still be reported on a P11d and as side note the salary sacraficed amount would not decrease the benefit amount as it is still taxable.
The benefit to the employee would be the saving on employee NIC.
Thank you.
Posted Tue, 07 May 2024 12:36:11 GMT by Dan Weg
Hi, Please can you clarify the above. The information all says that the BIK is 2% of the market value of the vehicle for electric cars but you seem to imply that there is no taxable benefit at all? Please could you clarify this?
Posted Mon, 13 May 2024 10:57:41 GMT by HMRC Admin 8
There would be a taxable benefit which would be captured on a P11d.
To clarify the point about a salary sacrifice not decreasing the benefit charge is because no tax has been paid on the salary sacrificed amount because the individual has given up the right to this money.
The only way the benefit charge can be reduced by an employee is to use their taxed income ie net income to reduce it.
Thank you.
Posted Tue, 14 May 2024 08:08:33 GMT by Dan Weg
So is the benefit charge on the amount of salary sacrificed or the 2% of the market value? If 2% of the market value is £1500 and the salary sacrificed is £6000 what will be used to calculate the reduction in tax code.
Posted Fri, 17 May 2024 08:23:31 GMT by HMRC Admin 25
Hi Dan Wegt,
Please this guidance to help with the calculation.
Expenses and benefits: company cars and fuel
Thank you. 

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