Our cutting-edge solution offers a win-win scenario, empowering your workforce with the opportunity to drive their dream car while benefiting from substantial tax savings. Discover how our innovative program can revolutionise your organisation's rewards strategy, driving employee satisfaction and financial well-being to new heights. It is ideal for large Limited company employers throughout the UK who want to offer something rewarding from their human resources department.
The scheme and how it works.
1: What is a salary sacrifice?
This type of arrangement enables you to acquire a new car of your choice with everything included. If you choose to be provided with a vehicle you agree to a reduction in your monthly basic salary (your salary before taking into account any salary sacrifice arrangement) by an amount equivalent to the monthly vehicle rental outlined when ordering your car. This vehicle value will not usually change over the course of the agreed period that you keep the car. By entering into this arrangement, you will typically save on Income tax and National Insurance Contributions (NlC) the amount of which will vary dependent on the type of vehicle you choose. Under the arrangement you will receive an Adjusted Salary (i.e. your salary after the salary sacrifice has been taken into account). Usually, the sacrifice is made in return for some form of non-cash benefit, which in this case is a car and is equivalent to the monthly lease cost. In the UK, many tax efficient benefits are provided via salary sacrifice such as childcare, pensions, cycle to work etc. The sacrifice is achieved by varying your terms and conditions of employment for the term which you choose to receive the benefit. For this scheme, it is either 24, 36 or 48 months. Salary sacrifice works great for those vehicles that emit 75g/km or less of CO2 ie plug in hybrid cars or full electric cars. Full electric offers the biggest tax saving.
2: What are the benefits of a Salary Sacrifice Scheme?
The benefits of sacrificing some of your gross salary for a company car are:
- Reduced employee tax
- Reduced National Insurance contributions (depending on the type of vehicle chosen)
- Access to large fleet discounts
- Possible VAT savings
- No credit checks to undergo
- No deposit to find
- The use of a fully maintained and insured new vehicle for the period of the lease as the cost of the car is taken from gross salary, you may pay less income tax and NI on your remaining salary. Under HMRC rules, the benefit (i.e. the car) is classed as a ‘benefit in kind’ (BIK) and you will become liable for company car tax, but for low emission cars this is often much lower than the tax and NIC saving you make on your lower salary.
3: What is included in the Car Salary Sacrifice arrangement?
The package is extremely comprehensive and includes the following for the life of the contract:
- All servicing and maintenance costs.
- The cost of unlimited Tyre replacements and repair.
- Fixed cost, fully comprehensive motor insurance for the Contract period with two extra named drivers allowed.
- Road tax for your vehicle for the term of your contract (at the prevailing rate).
- Full vehicle roadside breakdown and recovery service. You just have to pay for fuel and top up oil.
4: What will be the net cost to me?
Depending on the vehicle you choose you will save tax, NI and possibly VAT (that your company reclaims and passes on to you in the form of a lower rental) pension contributions (subject to the type of pension scheme your employer operates) on the salary sacrificed, the amount that you save depends upon your personal tax and national insurance position.
5: Could I get a similar deal by visiting my local franchised motor dealer?
No, the tax, NlC and fleet discount savings are only available via a salary sacrifice arrangement through your employer.
6: On what basis is the car provided?
Once you have chosen your car, we will enter into a Contract Hire agreement for that car and will then provide it to you under the salary sacrifice arrangement. The car is classed as a “company car” for tax purposes and will be treated as a “benefit in kind”. At the end of the agreement employees will have the choice to hand the car back or to request a price to purchase the car at the market value based on the vehicle’s age and mileage.
7: Will quotations vary over time?
Yes. Changes can occur in the amount of discount offered by manufacturers and quotes will take account of the changing cost of particular cars together with changes to finance rates.
8: How long is the quote valid for?
All quotes will be valid for a period of 30 days but in order to accommodate our order sign off process, the leasing company will refresh all quotations at the point of order if the above time limit has been exceeded. You will then have the opportunity to amend your car selection if the price has increased.
9: Is there a minimum or maximum term for the car scheme?
Yes, the scheme is restricted to either 24, 36 or 48 months.
10: Once I have chosen a vehicle, is the level of sacrifice guaranteed? Once your order has been authorised the sacrifice will be honoured excluding manufacturer price increases or exceptional circumstances. If the rate of VAT increases or VAT rules change during the period that the car is provided, we reserve the right to adjust the salary sacrifice arrangement to reflect the additional net cost of VAT that they are incurring or are unable to recover, in providing the car.
11: When will my car be ready for delivery?
This varies greatly depending on the car chosen. Some very popular vehicles which are in demand can be up to 12 months. An estimated delivery date will be available once the order is placed. If you need to obtain a car quickly just let the us know and they will search for stock or pipeline vehicles that are being shipped. If you are prepared to be flexible on colours and extras, we may be able to find a vehicle quicker than normal.
Unlock the Benefits Today! Get in touch with Paul (pictured above) on 028 9693 6363 or 0113 521 1666 or email sales@everyvehiclelease.co.uk
If you want a company vehicle tax calculated on your next company car you can ring 028 9693 6363 or email sales@everyvehiclelease.co.uk. Want to keep up to date on all things to do with contract hire? Sign up to our monthly news letter Newsletter Sign Up (everyvehiclelease.co.uk)