If you’ve ever looked into salary sacrifice schemes to provide your employees with vehicles, but aren’t sure if they are right for your business then you need to read this. Salary sacrifice schemes are rapidly growing, with 5% of vehicles provided by FN50 leasing companies going through this type of scheme.
How it works:
- In trade for part of the employee’s salary, they gain the non-cash benefit of a new lease car
- This creates potential tax and money savings for employee and employer alike
- By offering low emission cars, you can further increase savings
- Employee gains a new car at an affordable cost with maintenance, servicing, and breakdown cover all included
- Often this benefit can be provided at no extra cost to the business
Many businesses are seeing this as a more affordable alternative to the traditional company car. However, you will need to look at your demographic and ensure that you have eligible employees in order for this to be effective. If you have high staff turnover or are likely to restructure the business then this can also be a problem for this scheme.
It is not a one-size fits all type product, and while this scheme could benefit businesses of all sizes you will need to take steps to ensure that it is appropriate for your needs. The reality here is that you won’t always find savings or benefits in implementing salary sacrifice over a traditional company car.
That said, it can work to reduce your company’s tax liabilities and help your fleet to meet the duty of care that’s required from it. In other words, if this scheme matches your needs then it could help to increase employee retention, reduce cost and create additional benefits.
