salary sacrifice scheme

Funding a Car through Salary Sacrifice

Funding a Car through Salary Sacrifice

Funding a new car under a salary sacrifice scheme has many benefits to the employee and can be achieved with minimal cost and disruption to an employer. In brief terms, it is an arrangement put in place by an employer as an employee benefit whereby the employee agrees to give up part of their pre-tax salary – or ‘sacrifice’ it – in exchange for leasing a non-cash benefit such as a car. It is not intended as a replacement for a traditional company car scheme. While benefit-in-kind tax is payable by the employee on the car based on its list price and carbon dioxide emissions, this is often substantially lower than the income tax the employee would have paid on the salary sacrificed. And unlike a personally funded new car, a car provided under salary sacrifice includes all the traditional ben... »