Fleet Manager’s guide to salary sacrifice car schemes

It’s a complex job managing a company car fleet. There’s balancing budgets against cost increases. Then there’s meeting the demands of drivers while decarbonising the fleet under your company’s ESG strategy.

And what about those drivers who opted out of the company car scheme and took the cash? They want back in now.

Complex is only the half of it.

Electric car salary sacrifice, though, is one way to simplify it all. It offers fleet managers the opportunity to provide a more blended approach to vehicle provision across the business, from the wider workforce who do not qualify for a company car, to perk and cash allowance drivers who opted out of company cars when company car tax was on the rise.

It’s a powerful piece of car funding in the fleet manager’s toolbox. If you put it in there in the first place.

So how can salary sacrifice work across the business – and please everyone?

It harnesses the benign benefit in kind tax rates for electric vehicles by allowing drivers to pay the monthly rental out of their gross income. By doing this, it reduces their overall tax and National Insurance, while paying just a small amount of BIK tax. The net result is a fully insured and maintained car that costs less than if it were leased personally out of net income.

And, subject to certain criteria, such as an employee’s salary not dropping below the minimum wage post deductions, it can be enjoyed by all non-company car drivers. Not to mention helping decarbonise the company’s overall emissions as part of a wider ESG agenda.

What’s more, it helps de-risk the business (while de-stressing you, too). All those cash takers who chose salary sacrifice will now be in a fully insured and fully maintained car – no more worrying about whether they have the appropriate insurance or the car has been serviced correctly.

Of course, the other thing to mention is the decrease in the Class 1A National Insurance payable by using salary sacrifice. Now that’s something to tell the FD.

Oh, and while we’re on the subject of what to tell the FD, why not mention Fleet Alliance’s competitive tendering across a panel of funders for each car. So you only ever pay the best rental on the day. It can save you thousands on the bottom line. Not to mention Fleet Alliance’s special offers each month to provide your employees with real bargains – they’ll get to see them on the dedicated employee portal we provide.

Salary sacrifice: it’s a real all-rounder and a real crowd-pleaser. So isn’t it time it was in your toolbox?

Contact Fleet Alliance on 0345 601 8407 for expert advice and guidance. We can help you in person as well as online to establish the scheme successfully in your business. And if your staff need EV chargers, well, we can wrap up a PodPoint install as part of the service, too.