To illustrate the savings available, Fleet Alliance cites the example of a 40% tax payer taking an electric MINI Cooper SE on its salary sacrifice programme. The example is based on a 36-month contract covering 5,000 miles a year.
If an employee was to lease the MINI personally out of post-tax earnings, the car would cost £643 a month, with extra to pay for any service or maintenance.
However, under the Fleet Alliance salary sacrifice programme, the same electric MINI would cost the driver just £356 a month, including all benefit in kind tax, servicing as well as maintenance – a saving of more than £280 a month, without taking into account any SMR costs. Over the three years of the agreement, the electric car salary sacrifice would save more than £10,000.
The Benefits In Detail
- A significant cash saving that goes beyond the monthly payments to include full service and maintenance, so there is no additional budgeting for the driver. The only cost is the electricity to charge the car
- No impact on the driver’s personal credit lines – the contract resides with the employer. Andy Bruce adds: “Given the current cost of living crisis, that is a significant additional benefit and provides the employee with additional financial flexibility.”