Salary sacrifice in essence is set up so employees can pay part of their gross salary towards the purchase of a vehicle but make significant savings through income tax and National Insurance.
The benefits of a car salary sacrifice scheme are;
- Vehicles can be offered at no cost to the employer
- Manufacturers and contract hire companies can offer reduced rates
Company cars bought through salary sacrifice are still eligible for benefit-in-kind tax so the lower the CO2 emissions on the vehicle, the lower the tax likely to be paid.