Twelve months on from the uncertainty resulting from the governments consultation on salary sacrifice benefits, it was a welcome relief to see a positive story about salary sacrifice cars in a recent article by the BVRLA.
In the Finance Act, published 20th March 2017, the government clearly set out their desire to promote salary sacrifice schemes that supported a fairer tax regime and endorsed their environment requirements. This meant that true employee benefits such as child care vouchers, cycle to work schemes and cars were protected and the more questionable schemes were removed.
However the uncertainty created during last year’s consultation has left many people unsure about which benefits they should be offering to their employees therefore it was great to see that HMRC and HM Treasury have clarified their position on salary sacrifice cars. In particular that the finance rental should be separated out from all other costs when calculating the higher of the tax saving on the salary sacrificed and the normal company car benefit in kind. This validates the changes that Ogilvie made to our system as of 6th April 2017.
With the future of salary sacrifice cars confirmed we believe that it remains a fantastic way for businesses to offer their employee’s an affordable way of running a brand new, fully maintained and insured car.
Head of Salary Sacrifice
MiSalarySacrifice will be exhibiting at Employee Benefits Live from 10—11th October. Visit our stand to talk to Richard and his team about how car salary sacrifice schemes can help you attract and retain staff.