Frequently Asked Questions2019-10-11T14:33:26+00:00

Frequently Asked Questions

Lifestyle Lease (managed by Maxxia) is a unique method of optimising employee benefits, providing a highly desirable car scheme which offers employees a cost effective way of sourcing a brand new car.

The scheme enables your employer to provide you with a real and tangible benefit in regards to the provision of a new car. Lifestyle Lease allows you to have the use of a new car with all the usual benefits that are traditionally associated with the provision of a company car.

Lifestyle Lease allows you to benefit from employer negotiated discounts and, potentially, save Income Tax and National Insurance depending on the finance structure that is most appropriate for your circumstances.

A salary sacrifice scheme is a mechanism whereby you can sacrifice an element of your salary under an amendment to your Contract of Employment in return for a non cash benefit such as a company car.

It is likely that you pay for your current car out of your net (after tax) wage or salary. Employment law rules allow you to give up an amount of your gross (before tax) wage or salary, a procedure known as salary sacrifice.

Salary sacrifice is an established and proven mechanism in respect of other employee benefits of this nature such as childcare vouchers.

You can make tax and National Insurance savings by sacrificing an element of your salary in return for a benefit in kind payment.

You will receive less pay in return for a non cash benefit, in this case a car under a salary sacrifice arrangement through a monthly gross salary reduction.

Savings on Income Tax and National Insurance are based around your gross salary and, depending upon your gross salary plus any personal allowances, could see you saving tax and National Insurance from between 20% to 35% (based on current legislation for tax year 2016/7).

Please see for additional advice.

Entering the scheme will not affect other salary related payments to which you are contractually entitled.

The finance agreement is between you and Maxxia but whilst you are employed by an organisation that has introduced the Lifestyle Lease scheme, payment will be processed via payroll, either pre or post tax depending on the scheme and your chosen options.

The scheme provides an opportunity for you to drive a new car and benefit from corporate discounts and potentially savings on Income Tax and National Insurance (NI). There is no deposit required and you can get a new car every two or three years. It’s also possible to take a car for a family member too.

Included in your monthly payment

  • full vehicle maintenance
  • all servicing
  • replacement tyres
  • breakdown recovery
  • accident management service
  • Road Fund Licence

No, the tax and NI savings are only available via a salary sacrifice scheme which you can only do via your employer’s scheme. Maxxia has negotiated substantial discounts with a number of the major car suppliers to ensure you are getting a good deal.

HMRC views salary sacrifice as a matter of employment law rather than tax law, as employees are free to agree a change in their remuneration with their employer. To give approval for the scheme HMRC will want to establish that any change in salary is ‘permanent’ meaning that any change must be for a minimum 12 month period. You will be able to sign up to a car for either 24 or 36 months. In addition you must sign an agreement to sacrifice salary before you take delivery of the car. The sacrifice will coincide with delivery of the car.

There is no requirement to be in full time employment, however to participate in a salary sacrifice scheme, your reduced salary after the sacrifice must not fall below the National Minimum Wage and / or National Living Wage during the period of the agreement, or below the lower earnings limit for NIC purposes as this impacts on your ability to claim state benefits.

Only permanent employees who have been in employment for more than six months and satisfactorily completed their probation period can participate in the scheme. You can take a car for yourself or for an immediate member of your family defined as spouse, partner, or child. Step children will also be considered on a case by case basis. However, the Company reserves the right to refuse you entry to the scheme where it considers valid reasons exist.

Motor insurance costs will be based on the highest risk individual as determined by the Insurer.

Yes, employees who are eligible for a company car could take a car under the scheme for themselves or for a member of their immediate family.

You may continue to participate in the scheme but must not drive the car yourself. Alternatively you can opt to terminate the contract and you would then be liable for the appropriate early termination costs.

BIK applies to a benefit which an employee receives from employment but is not included in a salary e.g. a company car. HM Revenue & Customs rules state that BIK (also known as company car tax when applied to a car) is payable when you acquire a car via a salary sacrifice. Therefore, with a salary sacrifice based Lifestyle Lease, company car tax is payable whilst you salary sacrifice with your employer.

If you choose a vehicle with low CO2 emissions your tax and National Insurance savings should be greater than the BIK tax incurred.

Note that there are different funding structures possible which may work in a different way and so you should check with the Lifestyle Lease advisor to be sure you understand your scheme.

BIK tax is based on the manufacturer’s list price of the vehicle along with any accessories added to the vehicle (and which may increase its CO2 rating) – this is also known as the P11D value of the car. You will pay tax at your usual rate on a % of the P11D value of the car linked to its CO2 emissions.

For example if you are a 20% tax payer and you choose a petrol car with CO2 emissions of 103 g/km and P11D value of £15,500 you will pay £43.92 per month. This is calculated by,

£15,500        (P11D value of the car)
x           17 %    (the appropriate percentage of a petrol car with CO2 emissions of 103 g/km)
=    £2635
x           20 %    (your tax rate)
=      £527        per annum or £43.92 per month in the tax year ending 2016.

The tax payable on the car may change each year dependant on the COemissions of the vehicle chosen and the banding the car falls into. Further details are on the HMRC website.

Your employer will notify the relevant tax office within one month of you taking delivery of your car. The tax office will issue a tax code change. Payroll will then apply the new tax code in order that the BIK tax can be collected monthly from your salary.

As a safeguard, please inform your tax office that you have a company car as soon as you take delivery. This may avoid any delays in your tax code being changed.

Yes. Whilst the amount you sacrifice will remain the same, if the company car tax rate increases the additional tax will become payable and collected via a change to your tax code.

When you salary sacrifice your vehicle, the amount you sacrifice, your tax savings and National Insurance savings remain constant over the period of the agreement. Company Car Tax / Benefit In Kind (BIK) changes at the beginning of every tax year (April 6th) and generally increases. We know how much BIK is going to increase over the period of your agreement. Your documentation reflects the average increase in BIK over the period of the agreement. At the beginning of the agreement, the Net Cost To You will be less at the beginning of the agreement and more at the end.

Under current BIK rules the most cost effective vehicles are those that have a CO2 rating of less than 120g/km e.g. BMW 1 and 3 Series, Mini, Audi A1 and A4, Toyota Aygo, Toyota Yaris, etc. There may also be opportunities to take advantage of certain manufacturer incentives or promotions on other vehicles. Therefore, vehicles with low CO2 that attract large discounts and good residuals work best.

You will have a free choice of car in the scheme.

However, the choice of car will impact on the overall cost to you based on factors such as CO2 emissions, level of discounts available and your marginal tax rate.

Contact your Lifestyle Lease Consultant on 0800 464 0150 who will advise of your local participating main dealer.

This varies greatly depending on the car chosen and whether it’s a stocked vehicle. Typically, the waiting time for a non-stocked vehicle is between 12 – 30 weeks. An estimated delivery date will be available prior to the order being placed.

N.B. Do not sell your current vehicle based on the estimated delivery date, as the delivery date could change and you will be without a car.

Quotes are valid for 30 days. After that period quotations will vary because changes can occur in the amount of discount we are offered by manufacturers and quotes will take account of the changing cost of particular cars together with financing costs.

Once an order has been placed by the company for the vehicle chosen by you the price will be honoured except in exceptional circumstances.

There is a possibility of the CO2 rating of your car may increase if certain options are chosen. Unfortunately this cannot be confirmed until the car is built and tested. However, you should seek advice from Maxxia if you are unsure of the implications of adding extras although Maxxia cannot accept liability for any changes in your personal financial circumstances that occurs as a result of either the manufacturer increasing the vehicle’s price or the CO2 changing when the vehicle is registered.

The delivery driver will complete a hand over document that you will be asked to sign. Your signature will confirm your acceptance of the vehicle and condition. Before you sign, please ensure you are satisfied with the condition of your vehicle and that the vehicle is exactly the specification you ordered.

Lifestyle Lease is an comprehensive motoring scheme – you just need to add fuel.

With no initial deposit to pay, you will also benefit from:

  • Finance of the vehicle
  • Maintenance of the vehicle, including all routine servicing, batteries, exhausts and under normal wear and tear conditions.
  • Tyres – no quibble tyre policy subject to fair wear and tear
  • Annual Road Fund Tax
  • UK Roadside Assistance
  • Accident Management service
  • Damage outside of normal wear and tear conditions as defined in the BVRLA guidelines.
  • Excess Mileage. The excess mileage charge will be payable for each mile driven in excess of the Mileage Allowance.
  • Insurance. You will need to arrange your own motor insurance.
  • Fines and Penalties. If these are not paid by driver, they may be paid on the driver’s behalf and we will charge an administration fee.

The car will be procured by the company on a lease hire basis which means that the costs reflect the amount the car will depreciate in value over the term of the scheme. At the end of the scheme you will have the choice to hand the car back or to request a price to purchase the car at the market value based on the vehicle’s age and mileage.

The maximum lease term is 36 months and you can select a term of between 24 months and 36 months.

The term cannot be changed apart from in exceptional circumstances e.g. long-term sickness, maternity leave.

When selecting a car, you have the opportunity to choose the annual mileage. Should the vehicle be returned with more than the selected mileage you will be liable for an excess mileage charge to cover the expense of the additional depreciation and servicing costs that will have been incurred because of the additional mileage.

The excess mileage charge is set out in the regulated hire agreement.

During the course of the lease term Maxxia will periodically review actual mileage to check that it is in line with the agreed mileage under the lease contract and where there is a significant variation they will contact you.

If you have miscalculated your mileage, or your circumstances have changed, we will give you the opportunity to revise your mileage limit, and the monthly costs, typically between the 6th and 24th month of a 36 month agreement or the 6th and 12thmonth of a 24 month agreement.

If your application would result in your salary falling below the lower earnings threshold for National Insurance contributions it will be refused. This is to prevent the adverse effect this would have on your entitlement to statutory benefits such as sick pay, maternity pay and second state pension.

You will also be unable to participate in the scheme if this will result in your salary falling below the National Minimum Wage and / or National Living Wage during the period of the agreement.

The amount sacrificed will reflect the actual choice of car i.e. not only its CO2 emissions, but the value of the car, the available discount from the manufacturer, residual value, the length of the term chosen for example a 3 year term and selected mileage.

You will see the reduction in your next salary payment following delivery of the car. Deliveries of cars under the scheme will only take place between the 1st and 10th of each month in order to facilitate this and to provide payroll sufficient notice to make the adjustments.

No, pension contributions are based your salary before the salary sacrifice occurs. If you have any queries in respect of any pension arrangements, please contact HR for guidance and further information.

Some state benefits are linked to the amount of National Insurance contributions (NICs) and if you are worried about how your state benefits may be affected you should speak to HR.

Any changes in tax legislation will be reflected in the rental.

Costs may vary slightly in the second and third year of an agreement due to changes in government framework tax schemes such as benefit in kind, road tax and VAT.

Your Lifestyle lease agreement will run for either two or three years depending upon the term you chose. However, you can opt out if there are “life changing” circumstances, by completing a cancellation form. For a Lifestyle lease cancellation form please contact a Lifestyle Lease consultant on 0800 464 0150.

Note: Once you opt out of the scheme, you cannot re-join the scheme prior to the termination date of the original lease contract period.

If you opt out of the scheme you will not be charged a termination fee for early terminating your finance agreement if you are in your original company’s employment in the event of:

  • Redundancy
  • Resignation
  • Loss of Driving Licence on medical grounds
  • Accidental death
  • Lifestyle change
    • For example, an additional dependent

The deferral period from the start of your agreement on all events is 365 days.

Note: You must return your vehicle immediately. You will be liable for:

  • Excess mileage charges
  • End of contract damage re-charges
  • Any outstanding costs associated with the scheme

If you have left your original employer and kept your car but now wish to terminate before the end of the contract then the termination costs described on the finance agreement will be applicable.

Whilst you are employed by the original employer: If your salary reduces to the point where you can no longer continue to make the salary sacrifice payments because it takes you below the National Living Wage, you will be able to keep the car, until the sooner of, you return to work or the agreement period ends. You will not be liable for monthly payments during your absence period. You will be liable for excess-mileage charges, end of contract damage re-charges and any outstanding costs associated with the scheme.

The deferral period from the start of your agreement is 365 days.

If you leave your original employer and take the vehicle with you, you will be liable to pay the payment indicated on the Regulated Hire Agreement.

Whilst you are employed by your original employer: If you decide not to terminate your Lifestyle lease agreement when you go on Maternity / Adoption Leave your salary will continue to be reduced whilst you are receiving sufficient Occupational Maternity / Adoption Pay. However, under HMRC rules it is not possible to use Statutory Maternity / Adoption Pay to cover the lifestyle lease reduction. You will continue to be provided with the benefit of the car until, the sooner of, you return from Maternity / Adoption Leave or the agreement comes to an end.

The deferral period from the start of your agreement is 365 days.

If you leave your original employer and take the vehicle with you, you will be liable to pay the payment indicated on the Regulated Hire Agreement.

If you die whilst you have your Lifestyle Lease car and you are in the employment of your original employer, the car will have to be returned to Maxxia within three months. There will not be a fee charged for terminating your agreement early, nor any other scheme associated costs.

Outstanding liabilities will be taken by direct debit in the usual way.

Rentals will still be payable monthly at the value stated in the Regulated Hire Agreement.

This will depend on your agreement. Depending on the type of contract most suited to your circumstances, the amount payable at the end of the contract may be set out in advance. If not, the value will be set in line with the market value, based on the vehicle’s age and mileage.

In addition to any excess mileage charges applicable you will be responsible for meeting any unreasonable wear and tear charges levied where the car has been returned in an unreasonable condition. Fair Wear and Tear conditions are as outlined in the BVRLA guidelines.

Fair Wear and Tear conditions are as outlined in the BVRLA guidelines.

Maintenance is included in the scheme and you should call the Maxxia Driver Line on 0800 464 0150 to arrange to have the vehicle serviced and if required arrange for the vehicle to be collected from your place of work or home.

You are responsible for ensuring that the manufacturer’s recommended servicing schedule is followed to ensure that the warranty is not invalidated and avoid incurring any additional charges.

To arrange service, maintenance and repair please phone 0800 464 0150.

The cost of normal wear and tear of tyres is included in the scheme and you should contact the Maxxia Driver Line on 0800 464 0150 who will either direct you to the nearest nominated tyre centre or arrange for a nominated mobile unit to visit you to replace the tyre(s).

The scheme includes UK roadside assistance so a breakdown at home, at the office or anywhere in the UK is covered. Please call 0800 464 0150 if you need breakdown assistance.

Roadside assistance is included. In the event of the car being off the road due to an ‘at fault’ accident, a courtesy vehicle will be provided if available from the repairing garage. If the car is off the road due to mechanical failure Maxxia will endeavour to provide a replacement vehicle although this cannot be guaranteed. ‘At Fault’ accidents must be reported to Maxxia within 48 hours to ensure full cover applies.

Any parking, congestion charges or fines incurred by you or the named additional driver/s whilst using the vehicle will be your responsibility. Where possible these will be transferred to you. Where it is not possible to do this the fine will be taken by direct debit plus an administration charge of £15 +VAT. You can contest the fine after the charge has been paid. If you win we will refund the fine but not the administration charge.

The car insurance policy includes full cover for European travel up to a maximum period of 90 days in any one insurance year and with each trip not exceeding 30 days. If your trip or trips during that year will exceed these limits then you will need to contact Maxxia who may be able to extend cover for an additional cost.

You will also need to contact Maxxia to obtain a VE103 form (this is a legal requirement) as authorisation to take the vehicle abroad, at a cost of £15 +VAT; this is valid for 12 months.

Breakdown cover only covers the UK. Please contact your Lifestyle Lease Consultant on 0800 464 0150 who will be able to provide you a quote for European breakdown cover.

Where an MOT is required, the cost is covered as part of the scheme.

You are responsible for paying and / or registering your vehicle for congestion and toll charges.

It is possible that you can use the car for towing but will need to gain Maxxia prior permission to fit a tow bar. Permission will not be unreasonably withheld. Where a tow bar is fitted after initial delivery of the vehicle you will be responsible for meeting the cost in full and will be required to remove the tow bar fitted to the vehicle at the end of the lease term.

You will need to gain Maxxia’s prior permission to fit any non-standard accessories or other equipment. If permission is granted you will be required to remove these from the vehicle and make good any damage at the end of the lease term.

Yes and you will need to advise Maxxia at the time of choosing a car as this can affect registration of the vehicle. Please contact your Lifestyle Lease Consultant on 0800 464 0150 for more details.

The cost is £80 charged by the DVLA plus an administration fee £25 +VAT.

Yes, as part of the approval process we carry out licence checks on all drivers. Maxxia reserves the right to repeat this at any time as required.

It’s a company scheme so your HR department has to be comfortable with the car chosen and, if using a salary sacrifice, that the payment keeps you above the National Minimum/Living Wage during the period of the agreement.