Fleet Alliance launches new low cost salary sacrifice scheme for SMEs

Fleet Alliance launches new low cost salary sacrifice scheme for SMEs

Posted by

Kevin Blackmore

August 2021

Fleet Alliance has launched a brand-new salary sacrifice scheme to allow small and medium-sized businesses to offer their employees zero-emission electric cars at highly attractive rates, while cutting their carbon footprint and better managing their grey fleet risk into the bargain.

While the new scheme is available to fleets of all sizes, it offers particular value to SMEs who may not necessarily be aware of the benefits of this type of arrangement.

The scheme is an ideal way to provide employees who would not normally qualify for a company car – or those who have opted out in favour of a cash allowance – with ready, cost-effective access to fully maintained, zero-emission vehicles at no extra cost to the business.

It delivers significant cost savings due to Fleet Alliance’s multi-bid funding solution, which employs competitive tendering amongst a panel of funders to ensure the maximum value is delivered to employer and employee by selecting the lowest cost – a facility not normally available to smaller businesses.

The new scheme also offers employers complete freedom to tailor the lifestyle protection typically associated with salary sacrifice to their own circumstances, which reduces costs yet further enabling them to deliver greater savings to their employees

And Fleet Alliance is also providing access to e-Fleet, its acclaimed fleet management system, free of charge to salary sacrifice customers to help them manage their fleet administration.

The current automotive environment, with a growing national trend towards electric, zero-emission vehicles, is perfect timing for the launch. As a result, the new scheme will deliver monthly savings running into hundreds of pounds for employees who select electric cars, thanks to the Government’s tax breaks for EVs which heavily incentivise zero-emission models ahead of its 2030 ban on the sale of new vehicles powered solely by petrol or diesel.

To underline the cost savings that can be achieved by going electric through the new scheme, the monthly salary sacrifice rates for the new Volkswagen ID.3 electric car are compared to the Personal Contract Hire (PCH) rates for the same model:

Under the new salary sacrifice scheme, the new ID.3 would cost a 20% taxpayer £365 per month compared to £566 for the same vehicle under a PCH scheme.

That’s a monthly saving of £201, a figure that any employee is likely to find highly attractive, achieved through savings in Income Tax, National Insurance Contributions (NIC) and Value Added Tax (VAT), offset marginally by a small Benefit-in-Kind (BIK) tax charge.

As BIK tax rates remain attractive for fully electric cars due to the super-low 1% rate for the current tax year, which is then capped at 2% until the end of 2024/25, significant tax savings should be available for at least the next four years.

The monthly cost-saving is greater still with the Tesla Model 3. A 40% taxpayer would pay £550 per month under the Fleet Alliance salary sacrifice scheme, compared to a PCH cost of £973 – a saving of £423 per month.

Under the Fleet Alliance scheme, the employee effectively leases the car for two, three or four years with no deposit, and all costs, including maintenance, Vehicle Excise Duty, insurance and breakdown cover, included within the employee’s monthly salary sacrifice.

Businesses will gain by providing an attractive employee benefit without increasing costs, as well as generating monthly savings in NIC, encouraging employees into cleaner, better-maintained cars and reducing their risk from poorly maintained grey fleet vehicles.

Martin Brown, Managing Director of Fleet Alliance, commented: “We believe our new salary sacrifice scheme offers benefits for businesses of all sizes.

“But we believe it will resonate especially with SMEs for whom this type of scheme has not been widely available. Its advantages of lower leasing costs, full maintenance, fully comprehensive insurance and the option to tailor lifestyle protection offer particular value to SMEs.

“We believe now is the perfect time to launch such a scheme for all our customers and prospects as it takes maximum advantage of the prevailing tax regimes and the growing movement to electrification.

“And it provides an excellent opportunity to reduce your company’s carbon footprint and provide employees with a brand-new electric vehicle at minimal benefit-in-kind impact.

“To demonstrate its effectiveness, we provide exclusive access to our easy-to-use online calculator that helps demonstrate the savings potential available to both employers and employees for all new models available.

“As a business, we are fully committed to being zero-emission by 2030 and we know that many of our customers have made, or are moving towards, the same commitment. This new scheme will play a valuable role in helping them achieve that objective.”

You also might like…

If you liked this article then check out our posts about similar topics

Chancellor cuts National Insurance, extends fuel duty freeze and fully expenses leased assets

In the last Budget before the General Election, Chancellor Jeremy Hunt unveiled a series of headline-grabbing initiative...

2024 will be the year of the EV with greater supply and lower prices, says Fleet Alliance

2024 will be the year that companies look to accelerate down the electrification route, as they seek to meet their own E...

Automotive transmission specialist Xtrac opts for EV salary sacrifice scheme from Fleet Alliance

Xtrac, the world’s leading supplier of high-performance transmissions for top level motorsport and high-performance au...

Fleet Alliance reports strong uptake in EV salary sacrifice

Increasing numbers of businesses are adding the employee benefit of leasing an EV through a salary sacrifice scheme to t...

Edwin James Group targets carbon reduction with electric vans from Fleet Alliance

Edwin James Group has taken delivery of its first electric vans from Glasgow-based fleet management specialist, Fleet Al...

IBMG halves its carbon footprint with Fleet Alliance

The Independent Builders Merchant Group (IBMG) has seen a reduction of more than 50% in the carbon footprint of its flee...

Fleet Alliance offers new tool to help businesses assess EV readiness

Fleet Alliance, the Glasgow-based leasing and fleet management specialist, has introduced a new solution to help busines...

Spring Budget brings a welcome cut to fuel duty

Chancellor, Jeremy Hunt, brought some cheer for fleet operators when he confirmed that the 5p cut in fuel duty, announce...

Ready to make the management of your fleet more efficient?

Request a call back

Or Call Us On: 0345 601 8407
Schedule a call back