Family members benefit from salary sacrifice

Eight out of 10 employees are happy to pass on their company perks to their family – even company cars – according to Lex Autolease.

A poll of 130 UK employees reveals that a quarter of employees would find the scheme appealing, despite being financed directly from their own salary.

Lex Autolease’s salary sacrifice product is available to all large corporate firms with an existing fleet of more than 500 vehicles or an employee base above 1,000 staff. Companies will decide if it is appropriate to extend the scheme to employees’ family members.

Under the extended benefit scheme, the employee directly sacrifices a portion of their salary through their payroll, on behalf of their relative. The employee remains directly responsible for the vehicle including any charges, such as early termination.

However, employees can reduce the amount of income tax and National Insurance they pay due to forgoing a larger salary even though they will pay income tax on the company car Benefit in Kind. This makes it a very tax efficient way of remunerating employees, says Lex Autolease.

Andrew Hogsden, senior manager of Lex Autolease’s strategic fleet consultancy, said: “There is a tremendous amount of unexpressed demand for salary sacrifice from employees and even their extended family network.

“This type of solution can create a higher rate of uptake for firms making it even more financially appealing. Moreover, salary sacrifice drivers should generate incremental National Insurance savings for the employer too, which will last the entire lifetime of the lease.”