Rising NIC rates boosts salary sacrifice appeal
23 May 2011
Author: Tristan Young
The vast majority of non-company car driving staff would take up a salary sacrifice scheme if their employer offered one, according to new research from leasing giant Lex Autolease, which also claimed the rise in National Insurance rates at the last Budget makes the schemes even more attractive.
According to the survey, eight out of 10 grey fleet drivers would opt into a salary sacrifice plan if they could save money on their tax and if the monthly lease rates were competitive.
Promoting its own salary sacrifice product, Andrew Hogsden, senior manager of Lex Autolease's Strategic Fleet Consultancy, said: "The beauty of salary sacrifice is that it meets both of those financial requirements. Firms can pass on the benefits of their buying power to employees, and both parties also share in the National Insurance savings. Given that NIC rates were upped in April, salary sacrifice is now an even more attractive proposition."
Hogsden added: "Firms may be inclined to withdraw or cap benefits during difficult periods, but salary sacrifice is a cost-effective way to do the opposite. It's a superb tax-saving device, which by its very nature helps avoid wage price inflation."
Meanwhile, Lex has also surveyed drivers about the adoption of electric cars, with range anxiety remaining the biggest barrier to adoption.
The top three concerns stopping company car drivers switching to electric vehicles were listed as range (80%), access to recharging (79%) and length of recharging (75%).
Chris Chandler, principle consultant at Lex Autolease, said: "It's clear from our survey that company car drivers are very well informed. They know the shortcomings of the very latest technologies and are practical in their approach to vehicle selection.
In this case, the cars are not the main issue - it's the recharging infrastructure to support them.
"For example, just one in 10 drivers polled are concerned about the kerb appeal of driving an EV or hybrid.
"I think if you went back 10 or 20 years you would see a very different set of priorities, with the actual vehicles attracting most of the criticism. This is good news for firms looking to slowly introduce electric vehicles and work with their employees to manage down fuel and CO2-related costs across their fleet."
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