I recently came across some intriguing data from the Fleet200 Strategy Network (FSN) survey that indicates a notable trend in the implementation of salary sacrifice within fleets. A significant 36% of companies surveyed have embraced this practice, with 32% opting to replace their existing company car schemes, citing reasons such as sustainability, cost-effectiveness, and enhanced employee benefits. For those unfamiliar, salary sacrifice schemes empower employees to allocate a portion of their salary towards obtaining a new, eco-friendly vehicle. While employees are subject to benefit-in-kind tax, substantial income tax and National Insurance (NI) savings are realized. Employers, in turn, stand to benefit from Class 1 NI savings.
The potential savings are substantial. On average, businesses can anticipate Class 1 NI savings of £3,000 per electric vehicle (EV). For instance, a salary sacrifice fleet comprising just 35 EVs could yield savings in the ballpark of £100,000, as per insights from salary sacrifice provider Tusker. The survey aligns with findings from the British Vehicle Rental and Leasing Association (BVRLA), which reported a 34% year-on-year increase in salary sacrifice cars, reaching 42,616 vehicles in Q4 2022 compared to Q4 2021. Noteworthy is the prevalence of salary sacrifice adoption in public sector fleets, where 56% of respondents have embraced this model compared to 31% in private companies. Larger enterprises, especially those managing over 100 vehicles, seem to be at the forefront of this trend, with nearly half having introduced salary sacrifice, in contrast to only 19% among fleets with up to 100 vehicles. While smaller companies are considering this funding option, a considerable proportion has already incorporated salary sacrifice, often as a replacement for a traditional company car scheme.
I think salary sacrifice is gaining traction as a strategic approach in fleet management. As bookkeepers, it might be worthwhile to explore the feasibility of implementing such schemes within our respective workplaces, considering the potential financial and environmental benefits. I am thinking of having a conversation with my boss about this. What are everybodies thoughts on this trend, and salary sacrifice in general?
I have already implemented a salary sacrifice scheme within my organisation, We recognised the potential for cost-effectiveness, sustainability, and improved employee benefits. The process involved thorough research, analysis of potential savings, and collaboration with a reliable salary sacrifice provider. Our experience has been positive, and we've witnessed significant Class 1 NI savings. The employees appreciate the opportunity to contribute to a greener environment while enjoying tax savings. Moreover, the shift from traditional company car schemes has proven to be a strategic move for us. It's interesting to note the prevalence of salary sacrifice adoption in larger enterprises and the public sector, as highlighted in the FSN survey. The numbers speak volumes about the credibility and success of this approach in various organisational settings. For those considering bringing up this topic with their bosses, I would recommend compiling a comprehensive proposal that outlines the potential benefits, including financial savings, environmental impact, and employee satisfaction. Highlighting the industry trends and success stories, such as those mentioned in the FSN survey and BVRLA reports, can provide additional support for your case. I believe salary sacrifice is indeed a progressive strategy , and I guess it depends on your line of works and number of employees perhaps that would be a factor in its feasibility within their workplaces. If anyone has questions or needs advice on how to approach their boss about implementing such a scheme, feel free to ask, and I'd be happy to share more details about our experience.
Hope you're doing well! Your recent post about rolling out a salary sacrifice scheme in your company has got me more curious now. The whole cost-effectiveness, sustainability, and better employee perks angle really hit home. I'm seriously thinking about bringing this up in our place too. Could you elaborate on how you went about it? I'm curious about the steps you took, Also, you mentioned teaming up with a great salary sacrifice providermind sharing their name and how the collaboration went?
Your insights on the positive vibes around Class 1 NI savings and employees loving the green contribution are gold. And hearing that ditching the traditional company car schemes was a smart move for your lot is giving me some serious motivation and ammunition to bring this idea to my boss at the start of the year
Thanks for the tip on putting together a solid proposal. Any stumbling blocks or concerns from the bosses that you had to tackle in your pitch?
Totally on board with the idea that throwing in some industry trends and success stories, like the FSN survey and BVRLA reports, can really seal the deal.
Big thanks for being open to sharing advice and more details.
Certainly, I'd be more than happy to provide additional insights into the steps we took to initiate the process. Our approach involved a thorough examination of potential benefits, with a particular focus on illustrating how this initiative serves as a mutually advantageous solution. Regarding the salary sacrifice provider, we collaborated with Motor Source Salary Sacrifice (motorsourcesalarysacrifice.com). Their professionalism and seamless collaboration significantly contributed to the success of our implementation.
In terms of the procedural steps, we began by compiling data on potential savings and crafted a comprehensive proposal. This proposal emphasised the financial advantages, environmental impact, and the positive response from our team. Tailoring the pitch to align with the priorities of our management basically
The challenges encountered in gaining management approval revolved around ensuring a smooth transition from traditional car schemes. Our proposal addressed these concerns directly, underlining the anticipated positive outcomes and maintaining transparent communication.
The enthusiasm surrounding Class 1 NI savings and the environmental contribution played a pivotal role in our success story. The employee response has been overwhelmingly positive.
Undoubtedly, incorporating industry trends and success stories into our pitch proved to be instrumental. Referencing reports such as the FSN survey and BVRLA reports added credibility to our proposal, showcasing successful implementations elsewhere. Should you require further details or encounter any challenges, please don't hesitate to reach out. Best wishes with your pitch at the beginning of the year; I am confident it will bring about positive change for your team.
