Tusker, the Car Benefit People, have been leading discussions with Government over the salary sacrifice legislation. Faced with a range of questions regarding the changes to Car Benefit Schemes, Tusker address them here
In a nutshell, what’s different with the legislation?
There have been a number of misunderstandings surrounding the changes to salary sacrifice and as such, many of the benefits had been perceived to have been removed.
The changes that were implemented by Government in April 2017, don’t affect as many salary sacrifice drivers and employers as originally thought.
For drivers: they will pay either the Benefit in Kind amount or the tax on the amount sacrificed for the car only, whichever is the higher amount. It’s important to highlight that it’s the car only, as previously this was thought to be the entire amount sacrificed, which also included maintenance, insurance, tyres etc. It was for this reason that so many thought that savings had been removed, which was incorrect.
For employers: National Insurance savings are still available on over half of cars available on Tusker’s salary sacrifice scheme, which previously were thought to have been removed. This could mean savings of thousands of pounds for organisations, depending on the cars their employees choose.
What savings will employees/drivers now make?
98% of drivers will make the same level of savings to those who took a car prior to April 2017. Savings can be made through National Insurance, as well as through group discounts which Tusker passes on to their customers.
Why has this only just been announced?
It hasn’t. Tusker have been applying the legislation correctly since it was introduced in April 2017. Much of the industry had a different understanding, but Tusker have been working with HMRC and HM Treasury since the implementation of the Finance Act and now we’ve had written confirmation from Government that we are correct in our application, we have communicated this as swiftly as possible.
How does this affect ULEVs?
ULEVs still provide the biggest savings for employers and drivers, and so Tusker anticipates ULEVs continuing to increase in popularity over the coming months and years – we’ve had a 10% increase in ULEV orders this year.
How does Tusker’s scheme help with employee wellbeing?
Tusker’s Car Benefit Scheme provides a complete all-inclusive package for employers and drivers. There’s nothing for drivers to worry about – their monthly amount is fixed to help with budgeting and includes insurance, road tax, breakdown cover, servicing, maintenance, and tyres, all they have to do is add fuel.
We believe this can reduce the stress usually caused by car ownership and so can help improve an employee’s wellbeing.
How does Tusker’s scheme fit with objectives to reduce corporate carbon emissions?
We are committed to negating the carbon produced by the cars we put on the road, and actually reducing the carbon emissions from employees.
On average, employees’ cars are around eight years old, with emissions of around 140g/Km CO2. New cars tend to have smaller engines and be more economical, with average emissions of just 101g/Km CO2.
Additionally, Tusker’s scheme is entirely carbon neutral – we offset each car’s emissions, for its entire lifetime, through internationally-accredited schemes. That way, we’re fully counter-balancing the impact of that car being on the road in the UK.
For more information on implementing a scheme within your organisation, please visit www.tuskerdirect.com