A salary sacrifice car scheme is a great way to attract and retain good employees, by offering them a non-cash benefit which provides a cost-effective means of motoring. The benefit in real cash terms that comes from the employee paying less income tax and national insurance, also helps the employer, because the business also pays a reduced national insurance payment. But there are a number of other benefits to the employer in signing-up for the Pink Salary Exchange salary sacrifice car scheme.
It is well known that such a scheme is great for promoting loyalty and motivation within the workforce, and for providing a mechanism for better monitoring fleet costs, but there are significant benefits also in terms of safety and compliance. With businesses under increasingly tighter controls in terms of various regulatory constraints, managing different processes under one system is a great way to monitor and maintain compliance, and the Pink Salary Exchange scheme offers that ability with a simple online management portal and general scheme characteristics that help you adhere to a number of safety and compliance issues. We have outlined these below.
Human Resources
- Fair treatment – Many employees are not eligible for company cars, but with a salary sacrifice scheme there are no such hierarchical issues as the scheme is open to all employees. This ensures that the scheme is fair, inclusive and non-discriminatory.
- Data protection – The online management portal enables employee profiles to be set-up and maintained which are linked to the vehicles employees are driving. This ensures that your fleet management is compliant with GDPR requirements.
Health and Safety
- Grey fleet – Previous car schemes offered by businesses have included employees being provided with an allowance towards a car used for company purposes, but not owned by the company. This is known as ‘grey fleet’. Under this kind of scheme the employer had no control over the standard or age of vehicle an employee chose, and hence, it was difficult to fulfil a duty of care towards the safety of the driver, passengers and pedestrians etc, which the business still retains. Under a salary sacrifice car scheme the employer is still managing grey fleet, but with Pink Salary Exchange the business has access to brand new electric vehicles and which are leased with service and maintenance agreements attached. So the employer is able to monitor the use and condition of vehicles much more closely and professionally.
Environment
- Road to nett zero - The Pink Salary Exchange scheme deals exclusively with electric vehicles, so by signing up to the scheme the business immediately cuts its vehicle emissions to zero and hence is compliant with environmental targets, objectives and directives. These can be internal or external, such as to international standards like ISO14001.
Tax
- BIK Tax – From April 6th 2020 benefit-in-kind tax for zero-emission vehicles was reduced to zero, so the salary sacrifice scheme offered by Pink Salary Exchange ensures that the business is compliant with current tax rules.
- HMRC approved – The Pink Salary Exchange scheme is also officially HMRC-approved, which means it has been designed by a team including established tax experts and has satisfied the rules put in place by HMRC for tax compliance.
Communications
When implementing a salary sacrifice car scheme the business needs to ensure that communications are professional and comprehensive in terms of satisfying all compliance criteria. This means that employees need to be notified that signing-up for the scheme is optional not obligatory, and that all employees are fully informed on the full details of the scheme so that they know and understand the implications of signing up for it. This includes the fact that a lower salary could affect pension contributions and holiday entitlement in some businesses, but essentially means that the business has a duty of care to ensure that the employee can make a fully informed decision on whether to join the scheme or not.
