David Hosking, CEO, Tusker gives a run-down of the past year in car salary sacrifice schemes. With a lot of positive steps having taken place, the future of salary sacrifice is bright
What. A. Year! We’ve had great success with the Government in the 12 months since the Autumn Statement, 2016, although it’s certainly been a challenge for salary sacrifice providers. The changes announced by Government in November 2016 brought with it a sense of uncertainty, and for many, confusion, which we have gone to great lengths to resolve.
Since the announcement of the consultation into salary sacrifice as a whole in the summer of 2016, we worked with Government to identify their aims and requirements, and ensured that the application to cars remains fair, and consistent with Government policy.
Cars, with the application of Benefit in Kind (BiK), were already treated differently, and so our argument remained, that the restrictions placed on a range of salary sacrifice products, needn’t apply to cars.
Months of meetings, advisory sessions and a wealth of evidence was provided to Government Ministers, policy makers and advisors, before the Autumn Statement which helped to shape the original announcement surrounding ULEVs. Further interrogation highlighted that the changes which had been interpreted from the Autumn Statement, weren’t as drastic as originally thought.
We continued to work with policy makers and key decision makers in Government to achieve complete clarification on the new rules. Working alongside our tax advisors, EY, we eventually achieved this in September 2017.
The legislation doesn’t affect as many of our customers as originally thought. 98% of drivers will receive the same savings as they did previously, with 54% of organisations able to gain NI savings as before.
Tusker have consistently ensured customers are aware of the tax requirements in the law, and continue to work with organisations to ensure they are aware of the advantages of the scheme, both in terms of the savings they can make, as well as the positive impact on employee engagement, retention and motivation.
Despite the uncertainty and miscommunication of the changes by many, Tusker has had yet another bumper year. Launching over 85 new schemes in 2017, Tusker now offers their award-winning Car Benefit Scheme to over 800,000 employees across the public and private sectors.
The budget this year, is positive for the future of cars, and in particular, electric vehicles. The Chancellor has made £40m available for R&D into the charging infrastructure, £100m in grants for plug-in vehicles, and £400m in grants to develop driverless vehicles. Salary sacrifice car schemes offer huge savings on electric and hybrid cars, and with savings for employers too, there’s no better time to launch a car benefit scheme.
The scheme enables employees to save tax and National Insurance on a brand new car, which comes complete with insurance, tyres, servicing and maintenance, breakdown cover and road tax, for a fixed monthly amount.