Benefit From A Salary Sacrifice Car Scheme

Employees of your organization can now benefit from the rewards of driving a brand-new, well maintained and managed, company car.

Employees of your organisation can now benefit from the rewards of driving a brand-new, well maintained and managed, company car.

The salary sacrifice scheme provides all of the benefits of a company car, by saving people both money and stress. The difference being that a proportion of their salary will be sacrificed and deducted as a monthly retainer.

But the cost of the actual vehicle is deducted from the person’s gross salary, preventing them from making unnecessary tax and national insurance contributions.The employer also benefits by paying a lower amount of National Insurance and Corporation Tax.

The inclination for companies to replace their entire company car scheme with salary sacrifice schemes is ever increasing. However, salary sacrifice schemes are ultimately seen as a HR benefit for the entire workforce.

The scheme has been structured in a manner so that employees could pay much less than they would do elsewhere, and is an ideal way to increase employee benefits and satisfaction.

It’s not juststaff that can enjoy the benefits of the scheme, your business can to; with higher levels of staff motivation, retention and money saving. The scheme could be especially beneficial when hiring new employees – a brand new car is the perfect incentive for someone to want to work for you.

Business can also take advantage of newer, more fuel-efficient cars which offer additional benefits (the tax and NI savings dwarf the amount of company car tax payable) and also can help improve your business’ environmental credentials.

The salary sacrifice scheme can also be used to encourage employees to take advantage of low emission vehicles. Especially since more environmentally-friendly vehicles attract the lowest rate of Benefit-in-Kind tax.

Salary sacrifice schemes can also help to address ‘grey fleet’ issues within companies. Typically, grey fleet vehicles are those that are employee owned and used for work related journeys. Grey fleet vehicles can include privately owned vehicles, cars obtained via an employee car ownership scheme, cash-for-cars or a vehicle that the employee has hired outside of any company-provided scheme.

But employers must be careful with employee contracts because they may require amending to allow for the salary sacrifice schemes. They will also need to cover all potential risks such as early contract terminations and maternity leave costs. Plus, the salary sacrifice scheme could prove to be very expensive for businesses if tax rules are suddenly altered.

Companies should also look to have a strategic internal marketing plan in place to ensure that this is seen as an attractive option by employers. Else the scheme could result in few acceptances.

Employee circumstances can change overnight, meaning that it is vital to have carefully planned contingency measures in place.

The majority of car leasing brokers are already offering salary sacrifice schemes or will be launching such schemes in the coming months. These companies will work with you todevelop the right policy to meet your aims and objectives, and provide on-going support throughout the implementation and management stages.

0 Shares:
Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Best Warranty for a High Mileage Car

Getting a high mileage car insured needs proper knowledge on what's covered and the fine print in your auto policy. Here are the basic principles you should know before purchasing an extended warranty for a used car.
Most Accidents Cars
Read More

What Colour Cars Have The Most Accidents?

Follow the rules of the road and you should be fine. As long as you avoid texting, drink driving and speeding - there's no reason why you're more likely to have a serious accident than anybody else.