Many businesses are bolstering their reputations by adding car salary sacrifice schemes to their arsenal but many people are still unsure of how car salary sacrifice schemes work. If you’re tempted to incorporate a scheme and want to understand more about what they involve, read on.
So what is a car salary sacrifice scheme?
Employees agree to sacrifice a small piece of their pre-tax salary in exchange for a car. Such schemes supply employees with a range of advantages; benefit-in-kind tax is less than income tax and salary sacrifice car schemes are provided with full maintenance covered and insurance and road tax. This gives motorists plenty of savings compared to owning or leasing their own vehicle.
How does it work?
An agreement is implemented between three parties. The vehicle and leasing contract are provided to the employer and an agreement is made with the employee that places risks such as damage or termination risk on the employer or scheme supplier. Our tailor made approach works flexibly with employees and employers in mind to deliver a service that meets the specifications of both.
Why do businesses offer schemes?
There are advantages for both sides including attracting a loyal workforce, eliminating risks associated with certain benefits packages and contributing to forward thinking, environmentally friendly solutions.
Who benefits from car salary sacrifice schemes?
In order to be cost effective, an employee should earn a minimum of £18,000 per annum. Further savings can be utilised on cost effective low emission vehicles.
How do companies benefit from salary sacrifice schemes?
Businesses that have retained high quality staff greatly benefit from implementing such a scheme, and cement themselves as companies with something more to offer. The scheme is flexible in that it does not need to be made available to all employees and at the introductory stage, it can be laid out for a minority of specified workers. Companies also can cut NI costs, and implementing a scheme is usually cost neutral.
How can I find out more?
If you’re considering making the move and adopting a salary sacrifice scheme into your workplace, no doubt you’ll have a few further questions. If we’ve piqued your interest, all you need to do is get in touch.
Contact us or request your free guide that outlines everything that you need to know. If you’d prefer to speak with us directly, simply send us an email at email@example.com