Salary sacrifice schemes are
worth considering in light of changes to company car tax in 2013/14
tax year, says Ian Hughes
Salary sacrifice is widely used as a tax-efficient way to provide
employee benefits including pensions, childcare vouchers and ride-to-work
schemes. Since 2008, it has become a popular way for employers to
provide a car-based benefit to employees, due to the cost benefits
of salary sacrifice car schemes.
A salary sacrifice car scheme enables all permanent employees
to use a company car as part of their benefits package. They exchange
a fixed reduction to their gross salary each month and get to drive
a brand new car with an all-inclusive package. Since the reduction
is from the employee's gross salary they save on income tax and national
insurance (NICs).
