The Employer's Guide to Salary Sacrifice

By Mike Cottrill | Salary Sacrifice Specialist at Vehicle
Consulting
The Employer's
Guide To Salary
Sacrifice

Introducing myself...
Hi I'm Mike Cottrill.
I am the Salary Sacrifice Specialist at Vehicle
Consulting.
I help businesses implement salary sacrifice
into their business.
If you want to chat about salary
sacrifice Comment "Details" below...
I'll drop you a message on LinkedIn.

What this guide is about...
Welcome to the Employer's Guide to Salary Sacrifice. In this e-book,
you'll discover the benefits of implementing an electric car salary
sacrifice scheme in your business.
We'll cover the basics of salary sacrifice, the advantages for
employers and employees, and guide you through the process of
setting up a successful scheme.
Learn how salary sacrifice can help your business save money,
improve employee satisfaction, and contribute to a greener future.
Mike Cottrill

Understanding
Salary Sacrifice
What is Electric Car Salary Sacrifice and How Does it Work?
Salary sacrifice is an perk that employers can offer their employees, where
the employee agrees to forgo a portion of their pre-tax salary in exchange
for a fully electric car. This reduces the employee's taxable income, which
increases their take-home pay.
Employers benefit from salary sacrifice as they save on National Insurance
Contributions (NICs) due to the reduced employee salaries. The adoption
of electric vehicles through salary sacrifice also helps the environment and
improves a company's ESG ratings.

The Basic Process
A simplified Overview
Employer Chooses
Salary Sacrifice
Provider
Employer sets
up a salary
sacrifice scheme
Employee
chooses an
electric vehicle
and agrees to
the salary
sacrifice
Employee's
gross salary is
reduced by the
agreed amount
Employer
provides the
electric vehicle
to the employee
Both employer
and employee
benefit from
reduced costs
and tax savings
Comment "Details" below for more info.

Benefits of Salary Sacrifice

Benefits for Employers
Reduced CO2 Output
Hit your CSR goals and improve your ESG
rating.
National Insurance Savings
Reduce your company's NI contributions.
Enhanced Reputation
Show your commitment to sustainability and
social responsibility.
Increased Employee Satisfaction
Offer a valuable benefit that boosts
employee morale.
Easier Recruitment & Retention
Attract and keep top talent with competitive
benefits.
Potential For Streamlined Fleet
Management
Partner with a provider offering
comprehensive fleet management services
to simplify your fleet operations.

Benefits for Employees
Financial savings
Employees can save on income tax and
National Insurance contributions, resulting in
a lower overall cost for their new electric car.
Access to new electric vehicles
Salary sacrifice schemes enable employees
to drive the latest electric vehicles without
the need for a large upfront payment.
Reduced carbon footprint
By driving an electric car, employees can
contribute to a cleaner and greener
environment.aluable benefit that boosts
employee morale.
Lower operating costs
Electric vehicles typically have lower
maintenance and fuel costs compared to
traditional combustion engine cars.
Enhanced sense of purpose
Participating in a salary sacrifice scheme
allows employees to align their personal
values with their employer's sustainability
goals.

How Salary Sacrifice Works

Steps to Set Up a Salary Sacrifice Scheme
Determine the goals of
implementing a salary
sacrifice scheme, such as
reducing carbon emissions
or enhancing employee
benefits.
Identify your
objectives
Assess various providers
and compare their
offerings, pricing, and
expertise to identify the
best fit for your business.
Research
providers
Collaborate with your
chosen provider to
establish the terms and
conditions of your salary
sacrifice scheme, including
vehicle eligibility, employee
criteria, and contract
durations.
Develop a
policy
Inform your staff about the
new salary sacrifice
scheme, its benefits, and
how they can participate.
Communicate
with
employees
Regularly evaluate the
performance of your salary
sacrifice scheme,
gathering feedback from
employees and making
any necessary adjustments
to optimise its
effectiveness.
Monitor and
review

Factors to Consider When Implementing
a Salary Sacrifice Scheme
Employee Eligibility
Who can participate in the scheme? Consider factors
such as employment status and length of service.
Vehicle Selection
Determine the types and brands of electric vehicles
to include in your program, taking into account cost,
environmental impact, and employee preferences.
Scheme Costs
Analyse the financial implications for both your
business and employees, including tax savings,
National Insurance contributions, and administrative
fees.
Provider Expertise
Assess the experience and knowledge of potential
salary sacrifice providers, ensuring they can
effectively support your business and employees.
Environmental and CSR Goals
Align your salary sacrifice scheme with your
company's broader environmental and corporate
social responsibility objectives.

Challenges and Solutions
Challenge: Understanding complex
regulations
Solution: Partner with an experienced, BVRLA
registered provider who preferably has a
dedicated compliance manager.
Bear in mind choosing a provider with
experience of the car leasing industry is
beneficial as this is what the scheme is
centred around.
Challenge: Communicating the benefits
to employees
Solution: Develop clear and engaging
communication materials such as FAQs, short
videos, training sessions.
Challenge: Managing administrative tasks
Solution: Opt for a provider who offers fleet
management and support. They will manage
all aspects of the scheme once it has been
set up.
This is a key decision when choosing a provider.
Do you want one that will manage the scheme
for you or do you want to keep management
in house?
Challenge: Employees leaving during the
scheme
Solution: This is the biggest worry. Early
termination insurance is the best way to solve
this. You can choose if this is paid by the
business or the employee.

Employee Example
This example shows the take home pay after all car
payments, comparing a personal lease to salary sacrifice.
£3,171
Salary Sacrifice
£2,855
Personal Lease
£60K
Salary
Monthly Take Home
Pay after car
payment:
per month
after tax
Saving
£316
36
months
10,000
miles
*Value s corre ct at time of calculation.

Choosing a Provider

Questions to Ask When Choosing
a Salary Sacrifice Provider
Choosing a Provider
Find a provider that stays up-to-date with the latest regulations and
guarantees your scheme remains compliant.
Compliance is crucial to avoid penalties and maintain the integrity of your
program.
Make sure your provider is BVRLA registered and ideally has a dedicated
compliance manager.
Consider a provider committed to supporting your business not only in
setting up the scheme but also after the scheme has been implemented.
Strong customer service enhances the overall experience, increases
uptake of the scheme and ensures smooth operations.
Eg. Do employees have to have electricity supplied by their business?
Restrictions like this can reduce uptake in the scheme which is what you
want to avoid.
How do they ensure compliance with the latest
regulations and industry standards?
What kind of customer service and support do they
provide?
Do they have any restrictions?
Look for a provider with a proven track record and in-depth understanding
of car leasing and the salary sacrifice landscape.
A seasoned provider can navigate the complexities and offer tailored
solutions.
Consider a provider with comprehensive end-to-end solutions, including
fleet management and employee support.
Bear in mind that some providers set up the scheme and then leave the
management to you. Is this suitable for your business?
Ideally a provider should be able to tailor their offerings to your specific
business needs and objectives.
Customisation ensures a seamless integration with your company's existing
systems and policies.
Some providers offer a one size fits all solution which may not be suitable
for your needs.
What is their level of industry expertise and experience?
How comprehensive are their services?
How customisable and flexible is their salary sacrifice
solution?

The Different Types of Provider
Choosing a Provider
There are several different types of providers, here are a few of types to consider.
Comprehensive Service Providers
Offer: End-to-end solutions, fleet management, employee support, administration, and
compliance.
Pros: Hassle-free experience, time-saving, extensive industry experience, dedicated support.
Potentially higher employee uptake due to confidence in the scheme, resulting in increased
employer NI savings.
Cons: May have higher initial cost.
Electricity Supplier Linked Provider
Offer: A method for electricity suppliers to get long term customers for their electricity supply.
Pros: Potentially working with a well known name.
Cons: Potential dependency on the electricity supplier, potentially reduced employee
uptake due to electricity supplier restrictions, lack of flexibility, risk of being locked into
contracts with specific suppliers, potentially higher long-term costs.
One Size Fits All Provider
Offer: Standardised salary sacrifice schemes, basic support, and limited customisation
options.
Pros: Quick implementation, potentially lower initial costs.
Cons: Increased risk of misuse of the scheme. Lack of personalisation, may not address
specific business goals, limited flexibility, inability to adapt to changing business needs,
unsuitable for businesses with unique requirements. Results in lower uptake.
Tailored Solution Provider
Offer: Customised salary sacrifice schemes, personalised guidance, ongoing support, and
industry updates.
Pros: Reduced risk of employees misusing the scheme. Addresses unique business goals,
better alignment with company values, adaptive to changes in the business environment.
Cons: Potentially longer implementation time due to customisation.

Implementing
Salary Sacrifice
In Your Business

Restrictions to Consider for Your Scheme
Implementing Salary Sacrifice in Your Business
Minimum Service Period
Set a minimum service period that employees must complete with the
company before they can participate in the scheme to ensure employee
commitment and reduce turnover.
This is typically at least the employee's probationary period.
Typically 6-12 months.
Eligible Employees
Define which employees are eligible to participate in the scheme, such as full-
time, part-time, or temporary staff.
Most businesses make it available to all employees as long as it doesn't take
their gross salary below minimum wage.
Vehicle Selection
Limit the number of vehicle models available under the scheme to those that
meet specific criteria, such as environmental standards, cost, or performance.
An important thing to consider is vehicle range. Do you have employees who
use their cars for work who need to travel long distances? Ensure they can
only choose long range vehicles.
Maximum Vehicle Value Limit
Consider putting a cap on vehicle value if your employees.
You may not want your employees arriving at client meetings in £100K cars.
Minimum Mileage Limits
Set an annual mileage limit for the vehicles, with potential penalties or
additional charges for exceeding the limit.
Contract length
Determine the length of the leasing contract.
24-36 months is typical as warranty is usually covered for this period.
Early Termination Insurance Requirements
Consider making early termination insurance standard to avoid being stuck
with a car if an employee leaves your business.
Choose if it is the employer or employee who pays for this.
Maintenance and repair
Set guidelines for vehicle maintenance, repairs, and servicing to ensure the
cars are well-maintained and meet safety requirements.
End-of-contract responsibilities
Clarify the process and responsibilities for returning the vehicle at the end of
the contract, including wear and tear allowances and any penalties for
damage or excess mileage.

What happens if you choose Vehicle Consulting?
Implementing Salary Sacrifice in Your Business
Book a call with Mike
We have a brief chat to discuss your needs with a view to
arrange a full consultation
We meet for a full consultation
We determine the level of customisation needed for the
salary sacrifice scheme
We discuss your business requirements and goals
We make a suggestion of how to best set up the scheme
We create a tailored solution for your
business
Selection of electric vehicles and charging solutions
Decide on additional options such as insurance,
maintenance cover, and early termination
Develop any restrictions you want to put in place
1
2
3
We build a custom online portal for your
staff
Used for employee vehicle selection and management
Integration with client's existing systems (if necessary)
Employee education and training on portal usage and salary
sacrifice benefits
We launch the scheme
We manage the scheme moving
forward
Continuous fleet management services to ensure smooth
operation
Mileage amendments, drivers' license checks, and
compliance monitoring
Point of contact for employee inquiries and support
Regular performance reviews and adjustments as needed
4
5
6

Measuring
Success

KPIs for Salary Sacrifice Schemes
Measuring Success
Employee Participation
Measure the number of employees who have joined the scheme as a percentage of the total eligible workforce.
This is a key KPI for the success of all other KPIs.
Higher participation means lower CO2 emissions, improved ESG rating, higher employee satisfaction and greater NI
savings.
CO2 Emission Reductions
Monitor the decrease in CO2 emissions from the company fleet as more employees switch to electric vehicles.
A significant reduction in emissions showcases the environmental impact and alignment with sustainability goals.
Staff Retention & Recruitment
Assess the impact of the salary sacrifice scheme on employee retention rates and its attractiveness to potential new
hires.
Improved retention and recruitment figures suggest that the scheme is positively influencing the company's employer
brand.
Employee Satisfaction
Survey employees to gauge their satisfaction with the salary sacrifice scheme and the vehicles they have chosen.
High satisfaction levels indicate that the scheme is meeting employee needs and expectations.
1
2
3
4

Measuring Success
Below are some methods of how to measure each aspect.
Evaluating the Impact on Employee
Satisfaction and Retention
Conduct regular surveys to gauge employee satisfaction with
the salary sacrifice scheme, electric vehicles, and support
services.
Analyse survey results to identify areas of improvement and
monitor changes in satisfaction levels over time.
Share positive feedback and testimonials fromemployees to
demonstrate the scheme's success and encourage further
participation.
Employee Satisfaction
Compare employee retention rates before and after the
implementation of the salary sacrifice scheme.
Assess the role of the scheme in influencing employees'
decisions to stay with the company, taking into account factors
such as financial benefits, environmental impact, and
convenience.
Use data and employee feedback to refine the scheme and
make it more attractive, ensuring it continues to contribute
positively to employee retention.
Employee Retention

About
Us

Who are Vehicle Consulting?
About Vehicle Consulting
We're a car leasing
brokerage
Established for over 20 years
We specialise in:
Salary Sacrifice &
Fleet Management

What You Get From Us
About Vehicle Consulting
Leave the Admin to Us:
You do what you do
best
Forget One-Size-Fits-
All: Our Solutions Are
Tailored for You
Experience Eliminates
Worry:
Trust Our Expertise
High Adoption, Greater
Savings:
Our Intuitive Portal
Makes It Happen

FAQ

FAQ
There are a number of options. Generally, early termination insurance is in place, this can
cover any fees and car gets sent back tothe supplier.
Alternatively, it can be re-assigned toanother member of staff.
This is an important issue, somake sure you set this up in a way that suits your business.
Ensuring your employees are aware of, and understand the scheme is key toincreasing
uptake.
Typically you will need toprovide internal emails, training sessions and a dedicated
knowledge portal toexplain how it works.
Absolutely yes. Salary sacrifice has been voted the number 1 valued perk amongst
employees, beating pensions and flexible working.
If your competitors offer this and your business doesn't, it could be the reason an employee
stays or leaves.
Educating your staff on how it works and its benefits is key toincreasing uptake.
Salary sacrifice can be slightly daunting and difficult tounderstand, socontent explaining
the ins and outs are key.
Short form videocan be a great tool toexplain each part.
What happens if an employee leaves?
How do we launch it to our employees?
Can it reduce employee turnover?
How do we increase uptake in the scheme?
It varies depending on the provider you choose and how comprehensive and complex the
scheme is for your business.
As a ballpark figure, it is typically around 3 months.
Please bear in mind it varies from client toclient.
This varies drastically depending on the provider you choose.
If you choose a provider whooffers fleet management services, they will continue to
manage the scheme once it has been set up.
Other providers will set it up and leave your tomanage it in house, sothis is definitely a
major point toconsider when choosing a provider.
Salary sacrifice schemes benefit all businesses, but are especially impactful for:
High CO2-emitting businesses
Companies with high staff turnover
Businesses seeking improved ESG ratings
Companies with sustainability-minded employees
These businesses may find salary sacrifice schemes especially valuable in meeting their
specific goals.
How long does it take to set up and implement?
What kind of support and assistance will I receive in
managing the scheme?
Are there any specific industries or company sizes where
a salary sacrifice scheme is more beneficial or
applicable?

How To Get Started

Comment "Details" below...
Want to learn more?

Start salary
sacrifice
today.
Comment "Details" below and Mike Cottrill our
salary sacrifice expert will drop you a message.

The Employer's Guide to Salary Sacrifice

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