In November 2016 the chancellor announced changes to various salary sacrifice schemes, however cars were on the whole unchanged and the cleanest cars (plug in hybrids and electric cars) could actually become even better value!

For cars delivered before the end of April 2017 you can use the diagram on our quotes page as a guide with savings of up to 45% on the cleanest car, for cars delivered after April rates will change for some cars as some of the income tax savings are removed.

For cars emitting 0-75 CO2              Nothing will change
Cars emitting 76-105 CO2                Will become around 7—12% more expensive
Cars emitting 105 CO2 Plus             No real change as the BIK already equals the tax saving

Please remember it’s not just the tax saving that you benefit from, additionally you normally make savings from VAT savings (typically 13-15%), NI savings (typically 12%) and our volume discounts.

Of all the 3,000 models on our quote engine only around 24% will increase in cost and only then if you delay order, well over 97% of our models will currently arrive well before the end of April!

HMRC over the last few years have become increasingly concerned about the number of new salary
sacrifice arrangements. You can now salary sacrifice for everything from American fridge freezers to games consoles but many of these arrangements have not been approved.

Cars have been approved since 2008 but they are being reviewed as part of this process. Although we feel it unlikely that our customers will be effected we feel it important that employees are very aware of this and the ‘worst case’ scenario should any change occur.

The Basic Change

Schemes will continue to give you savings on volume discounts, VAT and lower interest rates, cars will continue to have no deposit and include everything but fuel. However for cars the tax saving will be removed, whatever tax you save this will potentially be charged as company car tax, not based on CO2 but on your tax saving.

How can I work out the possible impact?

If this change is made salary sacrifice car will still be cheaper than retail but they will become more expensive. It is vital that you understand any additional costs and ensure that this is affordable to you as we can not be held responsible for HMRC changes and you won’t be able to cancel your order once placed or delivered.

Your quotation will highlight the current tax saving and benefit in kind;


In this example the employee pays £54.85 tax currently but saves £89.25 income tax. This could mean that from April the tax on car benefit would be £89.25 making the car £35 per month more expensive.

This is still a significant saving compared to retail and please remember this is a worst case scenario. We feel a change like this unlikely and any change is extremely unlikely to effect current cars.

The government will finalise it’s changes by end of year, if you’re concerned about affordability should these changes happen you should delay your order. If you have any other queries please speak with Driverline, we’re here to help!