How do Car Salary Sacrifice Schemes Work?

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. Read on if you want to understand more about what the schemes involve.

What is a Car Salary Sacrifice Scheme?

Employees agree to sacrifice a small piece of their pre-tax salary in exchange for a fully maintained car. Multiple advantages are supplied: benefit-in-kind tax is less than income tax and car schemes are provided with insurance & 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 is provided to the employer, and an agreement is made with the employee. This places risks such as damage or termination risk on the employer or scheme supplier. Our approach aims to meet both employee and employers specifications with the flexibly they have in mind.

Why do Businesses Offer Schemes?

There are advantages to both sides. These advantages include attracting a loyal workforce, eliminating risks in 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. Low emission vehicles are cost-effective, so they will save you your pennies.

How do companies benefit from salary sacrifice schemes?

Businesses that have retained high-quality staff greatly benefit from implementing such a scheme. Also, they can cement themselves as companies with something more to offer. The scheme does not need to be available to all employees as it is flexible. Similarly, at the introductory stage, it can be laid out for a minority of specified workers.

Companies can also cut NI costs, and implementing a scheme is usually cost-neutral.

How can I find out more?

If you’re considering 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!

Want to find out how we’re different compared to the rest of the competition? Find out here!