Fleet News

Maxxia UK launches portable salary sacrifice car scheme

Gordon Calder-Jones, Maxxia

Maxxia UK has launched a car salary sacrifice scheme under which the agreement is held with the employee and not the employer.

The company said under most schemes, the employer is responsible for any settlement due in the event of a lease being terminated ahead of term, but its Lifestyle Lease product removes this liability by establishing the lease agreement directly with the employee.

This also means that if a participating employee leaves the company, they are able to continue their agreement either through their new employer or privately.

Gordon Calder-Jones, business development director for Maxxia, said: “Salary sacrifice car schemes have been growing in popularity in recent years.

"Provided as part of a benefits or rewards package, they offer non-essential car users an attractive and tax efficient benefit, contributing towards staff retention and attraction targets.

“But for many employers, the liability attached to potential early terminations has been, and continues to be, an area of concern.

"While they appreciate the many benefits in the context of a corporate environment are unable to rationalise this downside."

Maxxia UK's Lifestyle Lease "elminiates this downside", according to Calder-Jones, as the lease agreement is established with the employee and the employer’s involvement is therefore limited to collecting payment through gross salary deductions and authorising employees for the scheme.

He added: "There is no set up cost or administrative fee and in the event of the employee leaving, they take their car with them and can then choose to either engage their new employer and continue to enjoy the salary sacrifice savings permitted by surrendering a proportion of their gross salary each month, continue the agreement but not on a net basis, or terminate the agreement, usually for a negligible sum assuming mileage and usage conditions have been adhered to."

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  • Phil Arnold - 18/04/2016 10:18

    Then presumably there are no tax or NI Savings for employees and no Employer NI savings. So in essence this isn't a salary sacrifice product at all just a leading scheme via payroll deduction from net pay ?

    • Sarah Gray - 18/04/2016 11:58

      It reads as though there would be tax and NI savings for the employee as the money is deducted from gross, therefore the employer would benefit from the NI savings. What I don't understand is if the agreement is with the employee, do they have the BIK for a company car?

      • Nick Davies - 18/04/2016 15:49

        If the employer is facilitating the scheme to the degree that the vehicle is being provided by virtue of the employment (without title passing to the employee at the outset) I would have thought that it is a taxable BIK (despite the lease being in the employee's name). The employee will save PAYE & NIC on the sacrificed salary but pay BIK tax on the vehicle, exactly as with a "traditional" car salary sacrifice arrangement.

      • Gordon Calder-Jones - 18/04/2016 20:56

        To answer your point Sarah, yes, the employee will pay income tax on the beneift-in-kind of the car, as they would with any other salary sacrifice car scheme. But if they chose wisely by selecting a car with low carbon emissions, they can still realise substantial savings by offsetting this against the income tax & NI savings.

    • Gordon Calder-Jones - 18/04/2016 20:56

      I can confirm that Lifestyle Lease has been developed as a salary sacrifice scheme and as such qualifies the employee and employer for the usual salary sacrifice tax and NI savings. There is no catch, Lifestyle Lease is a genuine and comprehensive salary sacrifice car scheme product with the added benefits of portability and no risk.

  • Jon4312 - 18/04/2016 21:26

    Credit checking each employee who enters the scheme and in turn protecting the employer NOT the employee, sounds like a great benefit! (for the employer). Not sure this is a true Salary Sacrifice arrangement when the risk is on the employee. I can just almost preempt the conversation......... "Sorry Mr. Employee, we're making you redundant, please take your car with you on the way out"

  • oldnews - 19/04/2016 11:26

    have a look at sgfleet's novalease product. Its been around since 2012, is fully portable and has doesn't create risks for employers either. Employees are equally covered eg. if they are made redundant, they can hand the car back at no cost.

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