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Leaseplan launches salary sacrifice scheme

Date: 08 April 2010

Leaseplan has launched into the salary sacrifice market with what it calls "the most exciting product launch" in years.

The company hopes to have around 5000 cars on its Salary Plan scheme within three years, and said the main focus from launch will be HR and finance directors.

The UK's number two leasing firm expects the new scheme to be particularly popular in the public sector, where it could help combat the issue of grey fleets and, in turn, better control business car use.

"Salary sacrifice is the first opportunity to enlarge our marketplace for some time," said commercial director Matt Dyer. "It is a more efficient use of people's money because it is a smarter tax choice and can be a greener choice," he added.

Partaking in a salary sacrifice scheme means employees save on income tax and national insurance but still pay benefit-in-kind tax.

Employers save on national insurance contributions on gross income, though still have to pay NI on BIK taxation.

Dyer expects some companies to limit which cars are available on salary sacrifice, using capping by CO2 emissions to save maximum money.

Leaseplan has secured agreements with all manufacturers to maintain its normal discounts for cars bought on salary sacrifice schemes.

Dyer said the company would be willing to consider higher volume discounts to incorporate increased numbers of vehicles from salary sacrifice schemes.

Early analysts' predictions suggest between 5%-10% of workers could take up salary sacrifice schemes offered to them by employers as they become better known and understood.

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