HMRC change in guidelines

[jdrussell]

Hi,

Read my blog post here - not happy about it


Changed this cos I'm a bit silly.

 

[Norm]

Welcome to April 2010, when the HMRC published that guidance. It has also been a requirement of the scheme that the sale at the end of the rental period is at market value. Anything other than that has always attracted taxation as a benefit in kind.

I'm also not sure about your calculations. You assert that "Monthly repayments: £83 pre tax, about £70 after tax", can I join you on that tax rate please as I don't know many who are paying a marginal tax rate of only 15%.

I reckon your £83 gross will be closer to £50 net.

 

[2Loose]

+1 Norm.

Indeed, when I started the scheem I saw £70pm NET deductions on my salary slip, and had an angry moment before comparing take home to the previous month, to see that once other deductions had been factored in, the gross was far closer to £50.

The 25% is also an absolute extreme and Fair Market Value has always been part of the final payment in the scheme, so shouldn't have been a surprise tbh. There are a number of 'official' ways to get that down, such as extending the contract (but not the payments) so that another year or two's devaluation is taken into account.

The savings are far greater than your calculations show, jdrussell.

 

[ianrauk]

Looks like you had better withdraw your email jdrussel.

 

[adscrim]

In addition, if you are being asked for 25% as a final payment, it's the result of a decision made by your company. HMRC do not require the payment to be 25%, just that you are taxed on 25%.

 

[jdrussell]

In addition, if you are being asked for 25% as a final payment, it's the result of a decision made by your company. HMRC do not require the payment to be 25%, just that you are taxed on 25%.

Yes, this is fair comment. I will take this up with my employee. Thanks for all the comments.