Oct 27, 2016  •  10 min read

Matthew Walters, spokesman for the British Vehicle Rental and Leasing Association (BVRLA), is urging Fleet Managers to lobby their MPs on the new white paper that’s aiming to crack down on employees’ company car salary sacrifice benefits.

Matthew told an audience at Fleet Management Live that the legislation was flawed and would not bring about the revenue that it desired and urged delegates to write to their MPs now that the deadline for submissions to the consultation paper has closed.

Salary sacrifice schemes allow employees to use part of their salary for payments for a new car before tax and National Insurance is deducted, giving them 30-45 per cent more spending power.

They can also get insurance, servicing, maintenance and breakdown cover as part of the package.

It’s a great deal for them – and their employers get tax and National Insurance savings, fewer ‘grey fleet’ risks and worries and a reduced carbon footprint and a happier (and thus more productive) workforce.

But the government sees salary sacrifice as a revenue loophole that it wants to close. “These schemes offer a way of rewarding and retaining staff, particularly those in the public sector who have had to struggle with long-term pay freezes,” said Matthew.

“Most staff receiving this perk are in the basic income tax bracket and salary sacrifice schemes provide a chance to drive a newer, cleaner and safer car.

“The new car sales generated by salary sacrifice schemes boost the UK economy and provide a more sustainable alternative to the older, more polluting grey fleet vehicles that staff might otherwise use for business travel.”

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