More employers give green light to car benefit schemes
Tusker is seeing increased interest in its car benefit schemes, since future tax treatment was confirmed in the Autumn Statement. After extensive lobbying, the Government confirmed that employee car schemes can continue as a benefit of employment and furthermore they are going to be treated differently and more favourably than many other salary sacrifice products.
Not only has car benefit market leader Tusker seen an increase in enquiries from employers and employees, but several new schemes were given the green light as soon as the tax changes were announced last month.
David Hosking, CEO of Tusker, comments: “Salary sacrifice company cars remain an extremely valuable benefit to employees and will still save drivers thousands of pounds over the life of an agreement. We have launched many new schemes in the last few weeks and some of the employers that had delayed new scheme launches were more than happy to sign them off on the day of the Autumn Statement. We are now working with several new customers to launch their schemes before Christmas or early January.”
According to a recent driver survey conducted by Tusker, tax savings are not the main reason employees choose a salary sacrifice car. The top reason is the fixed cost structure of driving an all inclusive car, enabling drivers to budget accurately for their car use. Many employees mentioned that because maintenance and repairs are included they never have to worry about unforeseen garage costs.
Other reasons include the fact that there are no initial deposits or credit checks, the scheme is easy to join and that by going through Tusker, they have access to great corporate discounts. The tax efficiencies ranked at the bottom of this list.
Tusker has also looked closely at the tax changes announced during the Autumn Statement and has found that the perceived impact has been overstated. Across the thousands of cars that Tusker delivered on schemes earlier this year, 46% would not have been affected by the Government’s changes; either because they opted for a ULEV or because the drivers are already paying more in Benefit in Kind (BiK) than tax on the salary being sacrificed.
Of the remaining 54%, over a quarter will see an average increase of just over £2.44 per month.
Tusker also believes that where there is a larger increase, drivers will choose a different car which isn’t affected to anywhere near the same extent.
Due to wide ranging lobbying from Tusker and the industry, ULEVs have been made exempt from any changes and this rapidly growing sector will now continue to enjoy the same tax efficiencies that they always have, with these efficiencies increasing after 2020.
Hosking concludes: “Employers and employees have been quick to realise that the benefits of employee car schemes are still there even after these changes. Our schemes have always encouraged the uptake of low emission vehicles, and this trend will continue. And with manufacturers launching more and more ULEVs all the time these cars are likely to gain even more momentum under the new rules, which will benefit everyone.”
This article is sponsored by Tusker.
Read the next article
- Benefits Technology Sponsored by JLT Employee Benefits
- Bonus & Pay
- Company Cars Sponsored by Fleetworx
- Employee Engagement Sponsored by Reward Gateway
- Employee Share Plans
- Financial Wellness Sponsored by Close Brothers
- Flexible Benefits
- Group Risk Insurance
- Health & Wellbeing Sponsored by Health Shield
- International Benefits
- Staff Motivation
- Tax Efficient Benefits
- Total Reward
- Voluntary Benefits
- Workplace Pensions
- Future Predictions
- Workforce Demographics
- For SME employers
- REBA members' articles
- News Round-up
- REBA news
- Research reports
Sign up for REBA Professional Membership and join our community
Professional Membership benefits include receiving the REBA weekly email alert, gaining access to free research and free opportunities to attend specialist conferences.
Professional Membership is currently complimentary for qualifying reward and benefits practitioners.Join REBA today