Fleet Alliance has launched a brand-new salary sacrifice scheme to allow small and medium sized businesses to offer their employees zero emission electric cars at highly attractive rates, while cutting their carbon footprint and better managing their grey fleet risk into the bargain.
While the new scheme is available to fleets of all sizes, Fleet Alliance, which manages in excess of 30,000 vehicles, believes it offers particular value to SMEs who may not necessarily be aware of the benefits of this type of arrangement.
The scheme is an ideal way to provide employees who would not normally qualify for a company car – or those who have opted out in favour of a cash allowance – with ready, cost effective access to fully maintained, zero emission vehicles at no extra cost to the business.
It delivers significant cost savings due to Fleet Alliance’s multi-bid funding solution, which employs competitive tendering amongst a panel of funders to ensure the maximum value is delivered to employer and employee by selecting the lowest cost – a facility not normally available to smaller businesses.
The new scheme also offers employers complete freedom to tailor the lifestyle protection typically associated with salary sacrifice to their own circumstances, which reduces costs yet further enabling them to deliver greater savings to their employees
And Fleet Alliance is also providing access to e-Fleet, its acclaimed fleet management system, free of charge to salary sacrifice customers to help them manage their fleet administration.
The Glasgow-based fleet management and vehicle funding specialist, believes the current automotive environment, with a growing national trend towards electric, zero emission vehicles, is perfect timing for the launch.
As a result, the new scheme will deliver monthly savings running into hundreds of pounds for employees who select electric cars, thanks to the Government’s tax breaks for EVs which heavily incentivise zero emission models ahead of its 2030 ban on the sale of new vehicles powered solely by petrol or diesel.
To underline the cost savings that can be achieved by going electric through the new scheme, Fleet Alliance quotes the monthly salary sacrifice rates for the new Volkswagen ID.3 electric car compared to the Personal Contract Hire (PCH) rates for the same model. (See chart)
Under the new salary sacrifice scheme, the new ID.3 would cost a 20% taxpayer £365 per month compared to £566 for the same vehicle under a PCH scheme.
That’s a monthly saving of £201, a figure that any employee is likely to find highly attractive, achieved through savings in Income Tax, National Insurance Contributions (NIC) and Value Added Tax (VAT), offset marginally by a small Benefit-in-Kind (BIK) tax charge.
As BIK tax rates remain attractive for fully electric cars due to the super-low 1% rate for the current tax year, which is then capped at 2% until the end of 2024/25, significant tax savings should be available for at least the next four years.
The monthly cost saving is greater still with the Tesla Model 3. A 40% taxpayer would pay £550 per month under the Fleet Alliance salary sacrifice scheme, compared to a PCH cost of £973 – a saving of £423 per month. (See chart)
Under the Fleet Alliance scheme, the employee effectively leases the car for two, three or four years with no deposit, and all costs, including maintenance, Vehicle Excise Duty, insurance and breakdown cover, included within the employee’s monthly salary sacrifice.
Businesses will gain by providing an attractive employee benefit without increasing costs, as well as generating monthly savings in NIC, encouraging employees into cleaner, better maintained cars and reducing their risk from poorly maintained grey fleet vehicles.
Martin Brown, Managing Director of Fleet Alliance, commented: “We believe our new salary sacrifice scheme offers benefits for businesses of all sizes.
“But we believe it will resonate especially with SMEs for whom this type of scheme has not been widely available. Its advantages of lower leasing costs, full maintenance, fully comprehensive insurance and the option to tailor lifestyle protection offer particular value to SMEs.
“We believe now is the perfect time to launch such a scheme for all our customers and prospects as it takes maximum advantage of the prevailing tax regimes and the growing movement to electrification.
“And it provides an excellent opportunity to reduce your company’s carbon footprint and provide employees with a brand-new electric vehicle at minimal benefit-in-kind impact.
“To demonstrate its effectiveness, we provide exclusive access to our easy-to-use online calculator that helps demonstrate the savings potential available to both employers and employees for all new models available.
“As a business we are fully committed to being zero emission by 2030 and we know that many of our customers have made, or are moving towards, the same commitment. This new scheme will play a valuable role in helping them achieve that objective.”