Salary Sacrifice
Employee Benefit Schemes
Operating a salary sacrifice scheme allows your employees to allocate a portion of their salary in return for a non-cash benefit such as a car or a van. Compared with a traditional lease, this scheme can provide employees with access to a cost-effective means of financing a vehicle by reducing their income in return for a Benefit in Kind (BiK).
Working with our partners, Autohorn Fleet Services can act as your designated salary sacrifice provider to establish this scheme within your business.
Benefits of Salary Sacrifice
- A benefit that may help to attract and retain staff
- No tax is paid by employees on ultra-low emission vehicles (ULEV). Encouraging drivers to favour an eco-friendly fleet.
- Easy to order, implement and drive as Autohorn will be the main management provider.
However, there are risks involved with a salary sacrifice scheme which include:
- Any new agreements entered on or after 6th April 2017 will be subject to the new governing measures and may impact employee income tax and employer national insurance contributions.
- Education of staff is required to ensure that they engage and understand how the scheme operates.
- This scheme may also negatively impact the individual employee’s maternity pay, mortgage applications, life cover or other contributions.
- This scheme is not available for employees on maternity leave, or other forms of absenteeism as the employee pay is reduced, but the salary sacrifice contribution does not change.
With that being said, the potential benefits and risks of a salary sacrifice scheme is dependent on the circumstances of the individuals of the business. Therefore, it is worth contacting Autohorn Fleet Services to understand if a salary sacrifice scheme is a viable option for your business.
Implementing Salary Sacrifice
For more information on how to set up a salary sacrifice scheme for your business, please contact one of our friendly team.