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Accountancy and consultancy giant Deloitte has developed a new type of company car scheme that uses a salary-sacrifice system to lower the amount of tax paid by drivers and employers.
Under the low-CO2 scheme, dubbed 'All Employee', workers can make savings by "sacrificing salary in return for a benefit in kind, for example a basic rate tax payer could give up salary taxed at 31% (income tax and National Insurance Contributions) and take a petrol car with emissions below 120g/km and pay tax on 10% of the list price," said a Deloitte spokesman.
The employer saves because they can take advantage of volume discounts, recover VAT and save on National Insurance.
Mike Moore, a director in the employment taxes group at Deloitte, said: "The new company car tax rules coming into force from April 2009 change the tax relief available for businesses and are based on CO2 emissions. As such, employers will need to think again about how their company car schemes will work."
To put it's money where it's mouth is Deloitte has introduced the scheme to all 12,000 of its UK staff.
John Kerr, managing partner for talent at Deloitte, said: "This scheme provides a car for business and personal use which includes in the monthly cost fully comprehensive motor insurance, roadside assistance, maintenance and servicing and road fund licence."
Moore added: "Our new scheme goes against all historical trends where company car schemes are traditionally only open to senior executives. In fact, since its introduction just two weeks ago, it has already generated interest from over a third of the workforce."
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