Low take-up of salary sacrifice car schemes

Cars provided under a salary sacrifice scheme accounted for 5.5% of the combined fleet, according to research by ACFO.

The ACFO salary sacrifice survey, which polled organisations collectively operating almost 27,000 company cars, found that 1,464 were being operated via a salary sacrifice arrangement.

A fifth (20%) of respondents already have a salary sacrifice arrangement in place, while a third (33%) are currently considering introducing one. Another fifth (20%) said they had no interest in such a scheme.

The research also found that salary sacrifice arrangements were far more prevalent among larger employers, with 10% of organisations with more than 1,500 company cars having implemented a scheme, compared with 6% of employers operating between 251-500 company cars and 4% of employers with between 51-250 company cars.

Smaller organisations, with less than 50 company cars, were most likely to have no interest in a salary sacrifice arrangement.

Julie Jenner, chair of ACFO, said: “There has been a great deal of talk and media coverage of salary sacrifice schemes as a major development in the UK fleet market and, not surprisingly, providers talk up the market and suggest that take-up has exceeded expectations.

“However, our survey reveals that take-up would appear to be significantly below than indicated. Organisations may have a large number of employees and may have implemented schemes, but the reality suggests that car salary sacrifice only appeals to a miniscule number of employees.

“As with all employee benefits solutions, car salary sacrifice should be taken into account alongside many factors, including funding and tax issues, employee recruitment and retention issues, and business reasons.”

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