There are many things to consider when you evaluate salary sacrifice cars, but what are the facts behind the headlines? Here Fleet Evolution consider the top 10 myths surrounding salary sacrifice cars, and the reality During the last few years Fleet Evolution have come across many assumptions when it comes to salary sacrifice, some well founded, some less so and some quite inaccurate. Here’s the top 10 we’ve read or heard from everyone from competitors to accountants!
- You have to employ over 500 people for the scheme to work – Not so, our smallest customer has 7 employees and our largest 10,000, we have many customers with 50 employees yet 6-10 cars. No hassle for the employer and well received by the employe.
- You have to offer salary sacrifice cars to all employees – Salary sacrifice cars do not and should not be offered to all employees, we work with you to ensure the right employees are offered this benefit.
- It only works with hybrids – Nowadays salary sacrifice cars work with everything from a Nissan Leaf to a BMW 5 series.
- Schemes are admin heavy – We can’t comment on other schemes but our customers typically spend half an hour a month counter signing orders and making payroll amends we advise them on, that’s it!
- The Scheme will cost the employer money – Every Fleet Evolution scheme costs nothing to set up, we recoup our set up overhead once cars begin to be delivered, the employers costs are fully recovered from the employee via the salary sacrifice or exchange.
- The cars are not company cars – The cars provided are company cars but with a seperate agreement with the employee should anything happen to protect the employer.
- If the employee leaves early the employer will be left with the car – Not true, in most cases the car can be simply handed back to us with no penalty or the employee can take the car with them.
- The scheme only appeals to high earners – The scheme is a perk, our early adopters are not cash takers or essential users, they are not higher rate tax payers. Most of these groups have newer cars already with linked finance agreements. Our first post launch customers are valued staff doing the more mundane but vital parts of your process, the same staff that may not have had a pay rise during the last few years but are really feeling the pressure at home.
- The scheme has to be submitted to HMRC – HMRC guidance explicitly states that salary sacrifice is a matter for employment law, we ensure the tax rules are adhered to, unless you have employees doing a significant element of business mileage there is little benefit or need to submit the scheme to HMRC for approval. However we do offer this service free of charge for many customers.
- Schemes have poor adoption rates – We genuinely find salary sacrifice cars to be the most visible and inclusive benefit you can offer. We promote the scheme fully on your behalf and achieve a 10% adoption rate typically year one with the rate repeated year 2.
Why not view our scheme guide to decide if the scheme is right for you?