A salary sacrifice scheme is an employee benefit where the employee gives up part of their salary in return for a non-cash benefit such as a lease car. The employee benefits from a new car at a lower cost than retail prices, and the employer benefits financially through reduced National Insurance contributions, and potentially higher levels of employee retention.
What is the University's current position?
A scheme provider is being sought to operate the scheme via a procurement exercise. A scheme should be ready to launch in the spring. Below are some further details and some illustrative quotes (these will change once a scheme provider is on board).
How does the scheme work?
A scheme provider is appointed by the University. Employees browse the scheme provider’s website and request illustrations for vehicles that they are interested in. A number of variables will impact the price paid including the model and specification of the vehicle, the age of the driver and driver history including convictions, the agreed annual mileage and the duration of the lease (typically 4 years).
Once the vehicle is ordered and the user agreement is signed, then the vehicle and charging equipment is delivered and the payments are taken directly from payroll. Through the life of the lease, the vehicle should be kept in good condition with all servicing and repairs undertaken (for which the costs are included in the lease scheme). The vehicle is handed back at the end of the lease.
What's Included?
- Maintenance and servicing (including tyres)
- Breakdown and recovery cover
- Annual road fund licence
- Fully comprehensive insurance, with business cover
- Ability to add other family members to the insurance policy
- DVLA driver check.
- Charging equipment.
Indicative example scenarios
The following are five illustrations produced by a leasing company, and they are intended just to be a guide to give staff some idea of the sort of monthly cost commitment needed. Should the scheme be introduced then the costs below will vary.
Example 1
|
Employee data: |
Female, aged 42 (DOB 10th June 1979) Salary £33,797, 48 months and 12,000 miles per annum, basic Nissan Leaf, post code CB8 0AA, uses salary sacrifice scheme for child's nursery |
|
Vehicle Details - 5898351 |
Nissan Leaf Hatch 5Dr 0.0Electric 40kWh 150 Acenta |
|
Transmission |
Auto |
|
Options |
None |
|
P11d value |
£28,440.00 |
|
Indicative CO2 |
0 |
|
Contract Term |
48 months |
|
Annual Mileage |
12,000 |
|
Total Net Cost to Employee per month (incl. BIK) 2020/2021 i.e. actual cost take home pay reduces by, so true cost |
£209.45 |
|
2022/2023 |
£214.19 |
|
2023/2024 |
£214.19 |
|
2024/2025 |
£214.19 |
Example 2
|
Employee data: |
Male, aged 30 (DOB 9th July 1991) Salary £26,715, 48 months and 10,000 miles per annum, entry level car, post code CB22 7NP, no other salary sacrifice scheme in place |
|
Vehicle Details - 5898348 |
SEAT Mii Hatch 5Dr 0.0Electric 36.8 kWh 83 |
|
Transmission |
Auto |
|
Options |
None |
|
P11d value |
£24,990.00 |
|
Indicative CO2 |
0 |
|
Contract Term |
48 months |
|
Annual Mileage |
10,000 miles |
|
Total Net Cost to Employee per month (incl. BIK) 2020/2021 i.e. actual cost take home pay reduces by, so true cost |
£274.45 |
|
|
|
|
2022/2023 |
£278.61 |
|
2023/2024 |
£278.61 |
|
2024/2025 |
£278.61 |
Example 3
|
Employee data: |
Female, aged 28 (DOB 1st January 1993) Salary £25,941, 48 months and 10,000 miles per annum, post code CB6 3BW, no other salary sacrifice scheme in place |
|
Vehicle Details - 5886335 |
Peugeot e-208 Hatch 5Dr 0.0Electric 50kWh 136 Active Premium |
|
Transmission |
Auto |
|
P11d value |
£29,670.00 |
|
Indicative CO2 |
0 |
|
Contract Term |
48 months |
|
Annual Mileage |
10,000 miles |
|
Total Net Cost to Employee per month (incl. BIK) 2020/2021 i.e. actual cost take home pay reduces by, so true cost |
£339.94 |
|
2022/2023 |
£344.88 |
|
2023/2024 |
£344.88 |
|
2024/2025 |
£344.88 |
Example 4
|
Employee data: |
Female, aged 42 (DOB 10th June 1978) Salary £33,797, 48 months and 15,000 miles per annum, post code PE27 5QE, no other salary sacrifice scheme in place |
|
Vehicle Details - 5886386 |
Audi Q4 e-tron 35 SUV 5Dr 0.0Electric 55kWh 170 Sport |
|
Transmission |
Auto |
|
P11d value |
£40,695.00 |
|
Indicative CO2 |
0 |
|
Contract Term |
48 months |
|
Annual Mileage |
15,000 miles |
|
Total Net Cost to Employee per month (incl. BIK) 2020/2021 i.e. actual cost take home pay reduces by, so true cost |
£498.20 |
|
2022/2023 |
£504.99 |
|
2023/2024 |
£504.99 |
|
2024/2025 |
£504.99 |
Example 5
|
Employee data: |
Male, aged 60 (DOB 9th July 1961) Salary £49,553, 48 months and 10,000 miles per annum, post code CB4 3PG, no other salary sacrifice scheme in place |
|
Vehicle Details - 5886330 |
BMW iX xDr40 SUV 5Dr 0.0Electric 76.6kWh 326 Sport |
|
Transmission |
Auto |
|
P11d value |
£69,850.00 |
|
Indicative CO2 |
0 |
|
Contract Term |
48 months |
|
Annual Mileage |
10,000 miles |
|
Total Net Cost to Employee per month (incl. BIK) 2020/2021 i.e. actual cost take home pay reduces by, so true cost |
£661.63 |
|
2022/2023 |
£673.27 |
|
2023/2024 |
£673.27 |
|
2024/2025 |
£673.27 |