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I have an employee who has asked me to look at getting him a car on salary sacrifice basis.
Now , from what I know of it, my company would lease a car ( does it have to be a specific SS company or can i go anywhere ?), then I would cover that monthly payment from their salary - but pre tax. Is there a deposit to pay on such deals ?
Does the employee still have to pay BIK or is the car treated as their own ? Do I have to provide insurance ?
They would use the car for personal use, and where I need them to go places as part of their job during work hours.
Would they charge me the mileage rate for any work journeys ?
Are there any benefits for me, the employer to provide the car to them ( other than a happy employee of course 😀 )
Oh , and if they insure themselves, do they select Leased Private or Leased Business when asked the registered keeper and Legal owner on insurance quotes
Oh and if they insure themselves, do they select leased private or leased company for the registered keeper and legal owner when getting quotes .
Maybe you have to be a company of a certain size, but I would first check if it's as easy as signing up with someone like Octopus or Tusker to run it for you. I know they advertise their schemes as not incurring any costs to the employer.
My employer does it through Tusker, if setting up a new scheme if I was the boss I'd be contacting someone like them to set it all up as they'll be experts. The scheme covers insurance and maintenance, I contact Tusker, only reason I'd have to talk to someone in my organisation would be payment queries or escalation if Tusker not playing ball.
For other benefits for the employer it does make sticky employees (only a benefit if they're good!), the thought of handing in notice when it also includes giving a car back that you really like, are paying significantly less than retail and having to find a replacement definitely tips the balance. I know with mine I'd not be keeping it, the monthly price it costs me is fine just now, removing the savings I'd not even consider having this one.
We use Love Electric - no cost to us, apparently, but I leave that side of it to my accountant. We currently have two employees with electric cars. The best thing is, if they leave, we simply give the car back with no penalties.
We have octopus at work.
I couldn't make the sums work. I kept pointing that out to them but **** me it took long enough to back off.
I have an employee who has asked me to look at getting him a car on salary sacrifice basis.I don't know if you HAVE to do it through a recognised provider - but life will be easier if you do, as everything will be set up, and they will know the answer to all these questions, and what happens if the employee leaves (or you fire them) etc.Now , from what I know of it, my company would lease a car ( does it have to be a specific SS company or can i go anywhere ?), then I would cover that monthly payment from their salary - but pre tax. Is there a deposit to pay on such deals ?
no BIKDoes the employee still have to pay BIK or is the car treated as their own ?
npDo I have to provide insurance ?
[qupte]They would use the car for personal use, and where I need them to go places as part of their job during work hours.Would they charge me the mileage rate for any work journeys ?yes they would usually claim expenses just like normal
the major benefit is you don't pay employers NI on the sacrificed salary either. Say its £300 a month coming off their gross salary that means £45 a month less on your PAYE bill.Are there any benefits for me, the employer to provide the car to them ( other than a happy employee of course 😀 )
I assume leased private.Oh , and if they insure themselves, do they select Leased Private or Leased Business when asked the registered keeper and Legal owner on insurance quotes
As well as the leaver issues, your company is the lessee so might need to consider credit rating issues (especially if you do it a lot), and maybe even rules you may have about taking on debt/liabilities. I think the scheme isn't normally offered to a single employee - it should be broader (unless you only have one employee!) - not sure if that's an official rule. Employee needs to understand impact on pensions (if any), maternity/paternity/sick pay, earnings for mortgages etc. It is a very generous scheme and probably wont last forever, I think its all PPH so you don't own the car - at the end of the period there may be no car and no replacement scheme. They should also be aware that often the SS providers are charging more for their lease than shopping around would provide.
Oh , and if they insure themselves, do they select Leased Private or Leased Business when asked the registered keeper and Legal owner on insurance quotes
Love Electric include insurance in the package – I assume the others all do too?
It probably won’t apply in Thai care but if you let them have salary sacrifice you are still responsible for paying them above nmw after the salary sacrifices have been deducted.
My employer messed up and it’s going to cost £1m to put right in our case
Benefit for the employer is you don’t have to pay Employer NIC on the sacrifice so you’ll save 15% on the sacrifice value.
My employer uses Ogilvie. It's a full service lease so insurance, tyres, servicing, etc are covered but it appears expensive to me; I can PCP, for example, an MG4 for considerably less and still potentially have a car at the end.
There are a number of criteria that means you need to be earning around £35k before being eligible for even the cheapest cars they have available; it cannot take you below NMW and cannot be more than 25% of your salary (inc pension, so you have to deduct your contribution percentage from that which brings it down to 18% in my case). I have no idea if they are my employers criteria, Ogilvie's or the governments.
There are benefits though; it includes termination cover so if I were to leave or get sacked I have no liability. My employer, OTOH, has a 6 month notice period before they can hand the car back. They found this out the hard way when they went through a series of redundancies and ended up with three very expensive cars sat in the yard...
Does the employee still have to pay BIK or is the car treated as their own ?
no BIK
There is BIK on the Ogilvie scheme.
Also I've found (having set up a scheme at work and tried to lease one through my wifes work) the initial lease costs are significantly higher than a private scheme even considering the insurance.
Lease companies seem to pump up the lease cost in the mindset that the tax savings still save you a bit. last month when i looked i'd actually only save about £30 on a skoda kodiak compared to private lease
It probably won’t apply in Thai care but if you let them have salary sacrifice you are still responsible for paying them above nmw after the salary sacrifices have been deducted.
Yeah, on ours we can spend up to the point we'd be on minimum wage. I took it quite close to the limit so it means I couldn't then get a bike on B2W. Probably can now as my wage has gone up.
We use Tusker now and Zenith in the past, both have been decent enough. You do pay BIK but as we are limited to low pollution cars (the old £30 tax ones) or electric the rates are low and easily off set by the tax saving. Ours include tax, insurance (business), servicing and tyres so nothing much to pay other than the sacrifice and electric. Providing you dig out the deals it can be significantly cheaper than getting your own car and compares well with private lease from what I've seen. Best way to get the cheaper cars is to pick one they have in stock or is due in soon. Limits your options but that's where the deals are.