Benefit in the Spotlight
In November 2020, the Government announced a new ambitious target to end the sale of new petrol and diesel cars and vans by 2030, 10 years earlier than previously planned.
There’s already been an increase in interest with electric vehicles, with manufacturers making huge advancements in a short period of time.
These advances, combined with the Government announcement, has prompted employers to evaluate their current car schemes.
Car Salary Sacrifice - why are we shining a spotlight on it?
Employees can purchase a car and pay for it over a 24 to 48 month period, via salary sacrifice.
They get a brand new, fully-maintained and insured car for an affordable, fixed monthly amount. Great savings can be made from both tax efficiencies and manufacturer discounts on an all-inclusive package.
How can this benefit provide value to your organisation and employees?
Savings for the company and your employees
Employees can take a full advantage of the Government's decision to reduce the Benefit in Kind (BiK) tax payable on electric cars. This will go from 16% down to just 1% in 2021, increasing to 2% in 2022. For those not ready for an electric vehicle, employees can continue to benefit from tax efficiencies on Ultra Low Emission Vehicles (ULEVS).
And employers? You can make class 1 National Insurances savings on electric vehicles and ULEVs.
A worry free experience for employees
Employees will pay a fixed monthly amount from their salary in exchange for a brand new, fully-maintained and insured car. Deposit or credit checks are not needed, which means that the monthly amount is the only expense for employees. They don’t have to worry about the additional costs of owning a car, such as car insurance, servicing and other associated costs.
If an employee leaves the company they can simply hand back the car. Employees benefit from manufacturers discounts and in this way they get even more value for their money!
Replacing or complimenting legacy arrangements
Traditional Car Lease schemes can be complex and risky for employers.
Therefore, organisations are looking for alternative ways to provide car leasing options to their employees. Introducing a Car Salary Sacrifice benefit can provide an easy and flexible way to offer choice to employees, without the risk and hassle of traditional schemes.
Supporting a greener environment
This scheme provides greener benefit options to employees, as it actively promotes low CO2 cars.
The provider we have partnered with operates a carbon neutral scheme as it offsets the emissions of every car, for free!
What's next?
If you're interested in learning more, please get in touch with us. Our contact details can be found on the next page.