About Salary Sacrifice
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WHAT IS SALARY SACRIFICE?
Welcome to a new benefit which enables your staff to acquire a brand-new company car through our Salary Sacrifice Scheme provided by Bridle Vehicle Leasing.
The scheme is a true Salary Sacrifice scheme which enables your staff to acquire a brand new company car, fully serviced, maintained and insured for either 2 or 3 years – all they have to do is add fuel or charge the vehicle.
This scheme allows your staff to make substantial savings over traditional personal finance methods due to Income Tax and National Insurance (NI) savings, plus Fleet discounts on vehicles and maintenance costs, negotiated by Bridle Vehicle Leasing, are included in the package.
If your staff are given a cash allowance, all of the allowance can go towards payment of the vehicle using this scheme - unlike personal finance where the payment is subject to tax and NI deductions.
The car is still classed as a company car on which the employee has to pay company car tax, however they can choose from the lowest CO2 emission vehicles, including electric and hybrid powertrains which will minimise the company car tax payable, although some petrol and diesel vehicles still offer good savings too.
Electric and hybrid cars are now compatible with many employees’ driving patterns and huge savings are available on these because there is just 2% company car tax payable on electric vehicles, with very low tax on hybrids too.
There are also big savings to be made in Employer NI contributions on this type of vehicle. That means there is no cheaper way of acquiring a brand new electric or hybrid car than via this scheme!
WHAT DOES IT OFFER?
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HOW DOES IT WORK?
You save money by exchanging part of your annual salary for the car and the added services - before it is taxed - thereby reducing the amount of tax and national insurance you pay on the remainder of your salary.
As the vehicle is classed as a 'Company Car’ (Benefit in Kind) you must pay company car tax at the prevailing rate for the vehicle (via an amended tax code). However, this is often much less than the savings you will make in income tax and NI – especially if you choose a low or zero CO2 emission car.
At the end of the contract, you can either hand the keys back & order a new car, or you will also have the option to purchase the car.
AN EXAMPLE.
Here is an example for an electric Volkswagen ID.3 107KW Life Pro 58kWh 5dr Auto.
In the above example, the Gross Monthly Deduction from your salary is £511.57 per month (including everything except charging/fuel). However, you will save £102.31 in income tax (based on 20%) and £61.39 in National Insurance (based on 12%) if you are a 20% taxpayer. You should check the rates that apply to you.
Although you have to add back in the Company Car tax of £8.57 per month (collected via a change in your tax code), you will make an overall saving of £155.13 per month.
This means the amount you will see as a reduction in your net pay is only £356.44, instead of the original £511.57 cost.
HIGHLIGHTS.
The vehicle is fully insured, serviced and maintained throughout - with no upfront payment required!
Plus, there is just 2% Company Car Tax (BIK) on Electric Vehicles from the April 2022 tax year, making this scheme the most affordable way to acquire a brand new fully electric or hybrid car.
REQUIREMENTS.
To be eligible, employees must have completed at least 6 months of employment with you to qualify. They must also consider whether they are going to remain in your employment during the 2 or 3 years contract that they choose – as with any retail/personal finance arrangement, there could be penalties should they voluntarily leave employment before the end of the contract period.
Get in touch.
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