Businesses need to be doing more to raise awareness of Salary Sacrifice schemes, as new research shows that two thirds of company car drivers do not fully understand such schemes.
Lex Autolease, the UK’s largest fleet management provider, spoke to over 500 employees with company cars to find out what they thought of various funding options available for company vehicles. The findings revealed that lack of understanding is a major barrier to the take up of Salary Sacrifice schemes. More than two-thirds (68 per cent) admitted little knowledge of the schemes, under which an employee sacrifices part of their gross pay in return for a vehicle provided by the employer.
The schemes can benefit the employee and employer alike by reducing tax and National Insurance contributions, and the employee receives the traditional benefits of a company car such as shelter from unforeseen running costs. Since April, Lex Autolease has expanded its Salary Sacrifice offering with the addition of three major customers. In the two years that the scheme has been running, Lex Autolease has provided a combined workforce of over 90,000 with access to a tax efficient company owned vehicle. The Ford Fiesta and the Audi A3 are the most popular cars offered by Lex Autolease under the scheme, making up almost 25 percent of the total.
Andrew Hogsden, Senior Manager, Strategic Fleet Consultancy at Lex Autolease, said: “As the economy recovers and the employment market gathers pace, bosses are becoming more aware of the role a benefits package can play in attracting and retaining the best talent. We know that company cars are highly valued by employees, and Salary Sacrifice is a very effective way to provide a company car to employees who may not traditionally be entitled to a vehicle. “To ensure they are getting the best solution possible, businesses need to do more to educate employees about the breadth of options available to them. Only then can they maximise the potential of salary sacrifice to motivate and reward staff.”