Savvy firms turning to salary sacrifice to drive benefits in downturn
So says fleet management specialist Fleet Evolution, which adds that a growing number of firms are recognising how salary sacrifice schemes can be used to their advantage as well as that of their employees.
Managing director Andrew Leech said: 'Most companies tend to offer pension arrangements, but these are flexible. A salary sacrifice car attracts and commits the best level of candidate for your company.
'Most salary sacrifice car scheme specialists, offer an employer some peace-of-mind by taking control of the maintenance of a vehicle, leaving an employee more focused on the core business, rather than MOTs and services.'
Under the scheme, staff gain non-cash benefits for a contractual reduction in pay. This can generate significant savings in corporation tax and National Insurance.
From the fleet perspective, such schemes can be used to slash CO2 emissions and meet environmental targets. Essentially, the car is treated as a taxable benefit, so the lower its CO2 rating, the greater the saving for the employee. This also benefits the employer from a CSR perspective.
'On average, we are supplying vehicles that are emitting a third less CO2 than the vehicles which they are replacing. In fact, 87 per cent of the firm’s orders are for vehicles that emit less than 120g/km,' Leech explained.