ACFO Conference: Salary sacrifice schemes offer new savings
18 May 2009
Author: Tristan Young
David Rawlings will be speaking at the ACFO annual conference
Opting for a salary sacrifice scheme could become one of the best staff retention tools in coming years due possible tax savings for employees, according to fleet consultant David Rawlings.
Rawlings, speaking at last week's ACFO Conference, said: "Salary sacrifice schemes are coming to the fore, particularly in the second car market, when you think about this as part of a remuneration package."
"It's back to the future. You could pay 40% tax on salary or, for example, pay 13% tax on the money with a BMW 116d by using BIK and a salary sacrifice scheme."
However, he did sound one warning: "It's probably not the best time financially at the moment to thin about moving wholesale in salary sacrifice if you've got a large fleet or staff because you have to ask if you want to be left with those cars should things get worse. But as the economy rises then it becomes a very viable option. We're standing on the edge of a sea-change."
In the post-conference discussion a show of hands revealed 10% of ACFO members were already using salary sacrifice schemes and a further 10% were considering them.
However, some voiced their concerns over the system because they could be left with cars when employees left a firm or that there could be an effect on insurance premiums if a lot of younger employees took up a scheme.
On ACFO member pointed out a positive of the scheme which was that it moved staff out of 'grey fleet' vehicles into company cars.