Investigating the Integration of Salary Sacrifice in Fleet Administration

By : Forum Member
Published 19th February 2024 |
Read latest comment - 22nd February 2024

Hello everyone

I recently stumbled upon some interesting insights from the Fleet200 Strategy Network (FSN) survey that shed light on a growing inclination towards the adoption of salary sacrifice in fleet management. According to the survey, a substantial 36% of companies surveyed have embraced this practice, with 32% choosing to replace their current company car schemes. Their reasons vary, encompassing sustainability, cost-effectiveness, and improved employee benefits. For those not acquainted with the concept, salary sacrifice schemes empower employees to allocate a portion of their salary for acquiring a new, eco-friendly vehicle. While employees are subjected to benefit-in-kind tax, this is offset by considerable income tax and National Insurance (NI) savings. Employers, in turn, can enjoy Class 1 NI savings.

The potential savings are noteworthy, with businesses anticipating average Class 1 NI savings of £3,000 per electric vehicle (EV). For example, a fleet of 35 EVs under a salary sacrifice scheme could result in savings around £100,000, as indicated by insights from salary sacrifice provider Tusker. This aligns with the British Vehicle Rental and Leasing Association (BVRLA) findings, reporting a 34% year-on-year increase in salary sacrifice cars, totaling 42,616 vehicles in Q4 2022 compared to Q4 2021. Interestingly, the survey notes a higher adoption rate in public sector fleets, where 56% of respondents have embraced salary sacrifice, compared to 31% in private companies. Larger enterprises, particularly those managing over 100 vehicles, appear to be leading this trend, with almost half implementing salary sacrifice, as opposed to only 19% among fleets with up to 100 vehicles.

Even smaller companies are exploring this funding option, with a significant portion already incorporating salary sacrifice, often as a replacement for traditional company car schemes. In my opinion, salary sacrifice seems to be gaining traction as a strategic approach in fleet management. It might be worth considering the feasibility of such schemes in our workplaces, given the potential financial and environmental advantages. I'm contemplating discussing this trend with my boss. What are everyone's thoughts on this, and salary sacrifice in general?


Jackofall
Comments

I've successfully introduced a salary sacrifice program in my organization, recognizing its potential for cost-effectiveness, sustainability, and enhanced employee benefits. The implementation involved thorough research, analyzing potential savings, and collaborating with a reputable salary sacrifice provider. Our experience has been positive, with notable Class 1 NI savings. Employees appreciate the chance to contribute to a greener environment while enjoying tax benefits. Transitioning from traditional company car schemes has proven to be a strategic move. The prevalence of salary sacrifice adoption in larger enterprises and the public sector, as highlighted in the FSN survey, underscores its credibility and success in various organizational settings. For those considering proposing this to their superiors, I recommend preparing a comprehensive proposal outlining potential benefits such as financial savings, environmental impact, and increased employee satisfaction. Referring to industry trends and success stories, like those in the FSN survey and BVRLA reports, can bolster your case. Salary sacrifice is undoubtedly a progressive strategy, and its feasibility may depend on factors like industry and workforce size. If anyone has questions or seeks advice on approaching their boss about implementing such a scheme, feel free to ask, and I'll gladly share more details about our experience.


sandyy

Your recent post about launching a salary sacrifice scheme at your company has piqued my interest big time. The whole cost-effectiveness, sustainability, and enhanced employee perks angle really resonated with me. I'm seriously considering bringing this up in our workplace too. Could you dive into the steps you took? Also, you mentioned teaming up with a fantastic salary sacrifice provider – mind dropping their name and sharing how the collaboration went?

Your insights on the positive vibes surrounding Class 1 NI savings and employees loving the green contribution are pure gold. Finding out that ditching the traditional company car schemes was a smart move for your crew is giving me some serious motivation and ammo to present this idea to my boss early next year.

Thanks a bunch for the tip on putting together a solid proposal. Were there any stumbling blocks or concerns from the bosses that you had to address in your pitch?

I'm 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.

A big thanks for being open to sharing advice and more details. Appreciate it!


Jackofall

Absolutely, I'm more than happy to share insights into our process initiation. We thoroughly examined potential benefits, focusing on illustrating how this initiative is a mutually advantageous solution. For our salary sacrifice provider, we collaborated with Motor Source Salary Sacrifice  https://motorsourcesalarysacrifice.com, whose professionalism and seamless collaboration significantly contributed to our success. Regarding procedural steps, we started by compiling data on potential savings and crafted a comprehensive proposal. This proposal emphasised financial advantages, environmental impact, and the positive response from our team. We tailored the pitch to align with our management's priorities.

Gaining management approval had its challenges, mainly centered around ensuring a smooth transition from traditional car schemes. Our proposal directly addressed these concerns, highlighting 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, and the employee response has been overwhelmingly positive.Certainly, incorporating industry trends and success stories into our pitch was instrumental. Referencing reports such as the FSN survey and BVRLA reports added credibility to our proposal, showcasing successful implementations elsewhere. If you need further details or encounter any challenges, feel free to reach out. Best wishes with your pitch at the beginning of the year; I'm confident it will bring about positive change for your team.


sandyy