Salary sacrifice car schemes are an increasingly popular incentive that businesses throughout the UK are implementing in order to offer their employees the benefit of new cars in return for a set amount from their salary every month.
Such schemes in which employees can enjoy the benefits of a salary sacrifice for a new car has grown over the years in both public and private sectors. Just like pension contributions, private healthcare, childcare etc, salary sacrifice car schemes are increasingly popular amongst the workforce in the UK. Salary sacrifice schemes don’t only benefit staff, as they can boost your reputation as an employer and show your employees that you value your duty of care and responsibilities.
Choosing a supplier
Choosing the right supplier to implement a salary sacrifice car scheme is crucial; the supplier you select should be knowledgeable, credible, and able to administer impartial advice on incorporating a successful scheme into the business’s employee benefits package.
Like Pink Salary Exchange, the right supplier will fully understand the requirement your company may have in order to introduce the scheme and will take you through every step of the process, including designing the scheme and providing support during and after the launch of your salary sacrifice car scheme.
Many suppliers will also be capable of handling the extra administration tasks involved with such a scheme and can provide businesses with a dedicated team to oversee the process. This can also include checking the authenticity of the proposed scheme with HMRC and obtaining the necessary approval before the system is implemented within your company.
One of the biggest reasons that have caused the proliferation in salary sacrifice car schemes is the wide availability of hybrid or electric cars, which can be acquired without the requirement to pay Income Tax or National Insurance. This provides your workforce with the prospect of tax-efficient car ownership for more of your staff than only those who would qualify for a company car in order to fulfil their job properly.
Any salary benefits your staff enjoy typically benefit you as the employer as well; this is due to an increase in staff retention as well as a number of financial benefits. As these schemes are tax-efficient, both the employer and employee are liable for reduced National Insurance Contributions, which provides a discount towards the cost of the benefit provided; this makes utilising and implementing these schemes financially attractive for both the business and workforce.
Having a company car through a salary sacrifice car scheme remains one of the most sought-after benefits an employer can offer its workforce. For many potential employees, it is the difference between accepting a job offer or not. When it comes to your current staff members, many may move to competitors if they offer this scheme to their employees.
Salary sacrifice car schemes often have a direct impact on your team’s morale, and increased morale also leads to a more productive workforce. Due to staff motivation, recruitment and retention, implementing these schemes and allowing company cars to be widely available to your workforce is a considerable benefit to an employer.