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10 Dec 2015

Use of salary sacrifice car set to grow in 2016

While 2015 was a big year for salary sacrifice cars, 2016 looks set to take the trend even further. 

By 2025 it’s anticipated that one out of every ten new cars on the road in the UK will be funded through salary sacrifice according to global strategy consultants OC&C.

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Awareness of this relatively new employee benefit has grown substantially over the last few years. It benefits both employees and employers, and is fully managed and implemented by an external provider. The market for salary sacrifice cars is a fantastic addition to any company’s staff benefits package, increasingly so with the introduction of schemes tailored towards medium sized businesses, giving even more people access to this hugely valuable benefit.  

Salary sacrifice cars have also had an extremely positive impact on the carbon footprint of the UK new car market with average emissions of just 101g/km. This, compared to the UK average of 123g/km for new cars registered in the UK, demonstrates how the scheme influences the choice of car, with low CO2 emitting vehicles being much more cost effective.

Salary sacrifice received a special mention in both the Chancellor’s Budget back in July and also in the Autumn Statement. It should be noted that salary sacrifice cars are very different to other salary sacrifice schemes; a recent PWC report found that the schemes are tax positive to the Treasury over a long term basis, because employees pay benefit-in-kind tax on their vehicle.

Salary sacrifice cars also help drive additional tax revenues to the Treasury by promoting incremental new car sales, in-life management expenditure and disposal of cars into the economy.

Next year looks set to be another bumper year for salary sacrifice Cars, the environment and the Treasury.

This article was provided by Tusker.  

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