Employers and employees have both benefitted significantly from using reliable company car contract hire services over the years. Many small to medium businesses have enjoyed tax breaks by providing company cars through salary sacrifice schemes. The vehicles can reduce the tax burden and help with staff retention which is crucial for any company keen to keep hold of their best talent and deter them from going elsewhere. Small businesses who cannot afford to offer pay rises can instead use company cars as a tool to boost in-work morale. Government incentives have encouraged companies to offer eco-friendly cars to their staff, with those offering lower CO2 emissions being looked on favourably by the powers-that-be. Furthermore, the leading manufacturers are offering more and more low CO2 cars, widening the field of choice for employees.
Reduced Tax Liabilities for Employers and Employees
In salary sacrifice schemes, the employee forfeits a fraction of their pay in order to benefit from a fully-managed company car. The schemes usually need to last for at last a year. Many employees are drawn to the fact that the cars are managed and repaired on their behalf. It is worth investigating whether a company car will have an adverse effect on pension contributions, and for such reasons a company car isn’t always great for everyone. Company cars can help employees save on not only income tax but VAT and National Insurance, with the resulting savings eclipsing what they would pay in benefit-in-kind company car tax.
Preparing for a Company Car Scheme
As employers have a duty of care to their staff, it makes sense to encourage their staff to use a fully-managed car for work matters. Employers can choose to pass the National Insurance savings arising from company cars to their employees or retain them. Salary sacrifice cannot lead to the minimum wage not being met. If this is the case, employers face paying the difference from their own budgets. Employers can reduce the risk of a staff member leaving prematurely by investing in insurance or putting a fund together to offset any early termination charges. Sometimes they may pass the charge onto the employee. Employers also have a choice between using a leasing firm and supplying the cars themselves. It is also worth investigating the likely level of take-up, as many companies have begun contract hire leasing schemes only to see just a handful of employees signing up for them, leaving the firm out of pocket.
Find the Right Scheme for You
Mileage costs are always likely to be lower when green, low-emission cars are used. New green cars are less likely to need regular repairs either, saving the company more money. Whilst an employee is using a company car, they place less strain on their own vehicle, extending their lifespan in the process. If you do have a transient workforce, flexible and short team car leasing schemes may be high appeal. In any case, employees and employers alike stand to gain significant benefits from using local company car leasing services.
Reduced Tax Liabilities for Employers and Employees
In salary sacrifice schemes, the employee forfeits a fraction of their pay in order to benefit from a fully-managed company car. The schemes usually need to last for at last a year. Many employees are drawn to the fact that the cars are managed and repaired on their behalf. It is worth investigating whether a company car will have an adverse effect on pension contributions, and for such reasons a company car isn’t always great for everyone. Company cars can help employees save on not only income tax but VAT and National Insurance, with the resulting savings eclipsing what they would pay in benefit-in-kind company car tax.
Preparing for a Company Car Scheme
As employers have a duty of care to their staff, it makes sense to encourage their staff to use a fully-managed car for work matters. Employers can choose to pass the National Insurance savings arising from company cars to their employees or retain them. Salary sacrifice cannot lead to the minimum wage not being met. If this is the case, employers face paying the difference from their own budgets. Employers can reduce the risk of a staff member leaving prematurely by investing in insurance or putting a fund together to offset any early termination charges. Sometimes they may pass the charge onto the employee. Employers also have a choice between using a leasing firm and supplying the cars themselves. It is also worth investigating the likely level of take-up, as many companies have begun contract hire leasing schemes only to see just a handful of employees signing up for them, leaving the firm out of pocket.
Find the Right Scheme for You
Mileage costs are always likely to be lower when green, low-emission cars are used. New green cars are less likely to need regular repairs either, saving the company more money. Whilst an employee is using a company car, they place less strain on their own vehicle, extending their lifespan in the process. If you do have a transient workforce, flexible and short team car leasing schemes may be high appeal. In any case, employees and employers alike stand to gain significant benefits from using local company car leasing services.