Salary Sacrifice Car Leasing
It seems the current economic climate means we must all tighten our belts and compromise on standards, particularly when it comes to our cars. However, a better idea might be to shop around and see what deals are out there that you may not have previously considered – like a salary sacrifice car lease scheme.
What is a salary sacrifice car scheme?
The concept of salary sacrifice options and salary sacrifice car leasing schemes as an employee benefit has been around for several decades but in the Finance Act of 2009, the UK government introduced specific tax legislation for these arrangements including the company car salary sacrifice scheme.
The scheme is a way of leasing a car to an employee of a company with assistance from the employer generally resulting in the employee having a vehicle with the costs deducted from their gross salary. Meaning they are not paying any taxes on their earnings that are being used to fund their vehicle. Typical costs include car insurance, maintenance and repairs and often also fuel. This benefit scheme also helps an employee access a new car without the need for a large upfront payment. It is worth noting the availability and specifics of such schemes vary by employer, so it is advisable to research whether this is offered by your company and in what capacity.
How does a company car salary sacrifice scheme work?
An employee should always enquire as to what salary sacrifice options are available as it can be a good way of tightening your belt and increasing your monthly budget. With a salary sacrifice car lease scheme an employee selects a vehicle offered and agrees with the employer as to the amount of salary deducted each month.
The payment for the vehicle is deducted from the employee’s wages meaning a reduction of income tax and national insurance payments from their net pay. The scheme will run for a fixed period of usually between two and five years.
An employer will benefit from a salary sacrifice car leasing scheme in business operations and with tax savings. It is widely accepted looking after your staff will result in lower turnover and a more productive operation, whilst offering attractive benefits will encourage quality applicants.
By offering a car leasing scheme you are giving your people a greater standard of living with more freedom than offered on public transport, a means to get around when and where they need to and easy transport to and from work.
As the payments are deducted from the employee’s gross wages, you will have reduced employer national insurance contributions and, by encouraging a green option, your company can demonstrate sustainability commitment, possibly leading to further benefit schemes and future client approval.
Gateway2Lease’s Salary Sacrifice scheme
A Gateway2Lease salary sacrifice car leasing scheme is hugely beneficial to both employer and employee.The car is provided under a contract hire agreement with the employer and delivered directly to the door of the employee. The employee is responsible for the fuel or electric charging but for tax purposes, the vehicle is classed as a company car.
At the end of the term, you will simply return the vehicle. There will be an annual total mileage limit on the vehicle and additional miles may incur additional charges.
Please get in touch to speak to us about your specific requirements and let us help source the perfect vehicle and the perfect salary sacrifice car lease plan.
Get in touch or call us 01299 407 360
What are the benefits of leasing a car using the salary sacrifice scheme?
Employer benefits of a salary sacrifice car lease
- Reduced employer national insurance contributions.
- Fantastic staff benefit helping to attract and retain the best people.
- Travelling to work in well-maintained and fully insured vehicles reduces the ‘grey fleet’ risk by offering safety for your team and peace of mind for you.
- Eco-friendly options will reflect well on your company and reduce additional costs such as congestion charges.
- Employers will not need to offer consumer credit to their employees on these schemes.
Employee benefits of a salary sacrifice car lease
- Drive a new vehicle without a large downpayment.
- Full maintenance, breakdown cover and road tax included.
- Insurance cover provided by the employer.
- Save on income tax and national insurance.
- Flexible contract terms to suit your requirements.
- A wide range of cars to choose from.
- No credit checks on your file.
- One easy-to-manage fixed amount.
Leasing electric cars through salary sacrifice
The popularity of electric vehicles has been growing rapidly and the recent high costs and shortages in petrol and diesel have made them even more attractive. A vehicle you can fill up overnight at home, more eco-friendly and with lower running costs. What’s not to like?
This is why our electric car lease salary sacrifice scheme offers a great range of electric vehicles that come with even further benefits to both employer and employee including a demonstration of eco-friendly practices by the company, lower running costs, additional tax incentives, access to clean air zones, future-proofing and enhanced employee well-being.
The Salary Sacrifice Leasing Process
The salary sacrifice car leasing process is relatively painless and straightforward. We will guide the employer through the set-up, tailoring the scheme with the company and the employee requirements in mind.
1. Pick your car
The employee will choose a vehicle from our great selection offered on the salary sacrifice scheme and, once approved by the employer and all paperwork completed, the car will be delivered to the employee and the savings will begin.
2. Agree a lease
The agreed-upon deduction will be made monthly from the employee’s gross pay which will cover the lease, the insurance, servicing and maintenance. The employee will be responsible for adhering to usage guidelines to keep the vehicle in good condition.
3. Return your vehicle at end of lease
At the end of the lease, the employee will return the vehicle and enter a new company car salary sacrifice leasing scheme. Get in touch with our leasing experts to find out exactly what salary sacrifice car lease could be tailored for your specific needs.
Salary sacrifice car lease deals – manufacturers at Gateway2Lease
We are able to to provide salary sacrifice leases for electric vehicles from every brand available in the UK.
