Employee Eligibility
Salary sacrifice isn't eligible to all employees. There are a number of steps that need to be followed including your employer being signed up firstly.
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Employer Sign-Up:
- The employer must first be signed up with a salary sacrifice car scheme provider from Britannia Car Leasing. This involves setting up the scheme and onboarding the company.
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Eligibility Check:
- Employees must ensure their participation does not reduce their salary below the National Minimum Wage (NMW). Employers typically have procedures in place to cap salary sacrifice deductions to maintain compliance with NMW rates.
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Choosing a Vehicle:
- Employees select a vehicle from a list provided by the scheme. This list often includes a range of brand new electric vehicles, which are more tax-efficient and where the savings are much greater.
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Agreement and Contract:
- Employees agree to sacrifice a portion of their gross salary in exchange for the car. This agreement is formalised through a change in the employment contract, detailing the new salary and the non-cash benefit (the car).
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Salary Adjustment:
- The agreed amount is deducted from the employee’s gross salary before tax and National Insurance contributions are calculated. This reduces the employee’s taxable income, resulting in tax and National Insurance savings.
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Receiving the Car:
- The car is leased to the employer, who then provides it to the employee for personal use. The scheme can also be requested to include maintenance and servicing, making it a convenient and cost-effective option.