Launching a Tusker salary sacrifice car scheme

1. How does salary sacrifice work?

Salary sacrifice allows an employee to exchange part of their gross salary for a non-cash benefit, such as pension contributions, childcare support or an Ultra Low Emission car. Because the amount is taken from gross pay, employees can make savings on income tax and National Insurance contributions (NIC), while employers can also benefit from savings on the salary sacrificed.

It can be a highly valued employee benefit, helping businesses build a more attractive and competitive overall benefits package. A well-designed salary sacrifice scheme can play an important role in both retaining existing talent and attracting new employees.

When it comes to cars, employees can access a brand-new, fully maintained Ultra Low Emission car at competitive corporate rates and where a scheme focuses on pure electric and ultra-low emission cars, there can be significant financial advantages for both the employee and employer.

Salary sacrifice can also help encourage drivers to move towards cleaner, more environmentally friendly transport. By making electric vehicles more accessible, schemes can support the wider transition to lower-emission motoring while delivering economic benefits for UK drivers.

2. What happens with early termination, maternity leave or if an employee leaves the business?

Unlike many traditional car schemes, Tusker helps reduce the financial risk for employers and employees through a comprehensive range of protections. These can provide cover for circumstances including redundancy, maternity leave and long-term sickness, alongside a number of other lifestyle events.

This means that when an employee’s circumstances unexpectedly change, protections are in place to help prevent either the employer or employee from facing unnecessary financial penalties.

3. What are the future cost implications if Benefit in Kind tax increases?

Government-set Benefit in Kind (BIK) rates provide drivers with visibility over the future tax treatment of electric vehicles. Although BIK rates are increasing gradually, EVs continue to benefit from comparatively low rates, helping employees access the latest cleaner vehicle technology while still making valuable tax and NIC savings through salary sacrifice.

For employers and employees considering a scheme, understanding both current and future BIK rates is important when assessing the overall cost of a vehicle over its term.

4. What should companies consider if salary sacrifice will replace a traditional company car scheme?

For many employees, salary sacrifice can be more affordable than a conventional company car arrangement, particularly where the scheme prioritises EVs and low-emission vehicles. It’s ideal for a lot of companies as it can be made available to a much broader employee population through employee benefits provision than many traditional company car policies.

Businesses should consider salary sacrifice as an inclusive employee benefit from the outset, rather than one reserved for a limited group. Organisations can set their own eligibility criteria – as long as the employee doesn’t sacrifice more than National Living Wage, which is a stipulation HMRC makes.

Selecting the right provider is also essential. Working with a provider that integrates with major employee benefits platforms can simplify the employee experience, while proven experience managing large salary sacrifice fleets and the additional services associated with them can help ensure a smooth implementation. Strong customer service is equally important and can have a significant impact on employee engagement with the scheme.

5. Does this affect how the scheme should be positioned, marketed or measured?

An EV-focused salary sacrifice scheme can make a meaningful contribution towards reducing an organisation’s overall transport-related emissions. Tusker has found that businesses can successfully promote their schemes by combining two strong messages: the environmental advantages of switching to an EV and the potential financial savings available to employees.

This gives employers an opportunity to position the scheme as both an employee benefit and part of their wider sustainability ambitions.

6. What are the advantages and disadvantages of integrating the scheme into an existing benefits portal?

Tusker’s implementation approach gives employers the flexibility to integrate the scheme into an existing benefits platform or operate it separately. The best option depends on how the organisation already manages and communicates its employee benefits.

Integration can make the experience more straightforward, allowing employees to access multiple benefits from one central location. With single sign-on functionality, employees can move directly from their benefits platform into the Tusker site, removing the need to remember and manage a separate set of login details.

7. What are the advantages and disadvantages of using a standalone portal?

Some organisations prefer to keep individual employee benefits separate. In these cases, employees can access the Tusker portal directly rather than entering through a wider employee benefits platform.

Once an employee is logged in, the experience is the same whether they have arrived through a third-party platform or directly through Tusker. Supporting information and scheme documentation are held within the portal, giving employees convenient access from their phone or computer, 24 hours a day.

8. What is the most effective way to communicate a salary sacrifice scheme to employees? Are webinars, videos or in-person events best?

Tusker provides a tailored marketing and communications approach for each customer, designed to complement the organisation’s existing processes and communication channels. Every workforce is different, so communications can be adapted to help employees understand key aspects of the scheme, including salary reductions, BIK and selecting the most suitable vehicle.

Webinars have become particularly effective for scheme launches, enabling large numbers of employees to understand how the benefit works and ask questions in a relatively short period of time. Tusker also provides a wide selection of video content that can be hosted on company intranets or shared through YouTube links, helping employers explain different elements of the scheme.

In-person launch events can also generate strong engagement, particularly when employees have the opportunity to see a selection of available vehicles and speak directly with product specialists. For many organisations, a combination of digital and face-to-face communications can help reach the widest possible audience.

9. What should you look for when selecting a salary sacrifice provider?

A strong salary sacrifice scheme should provide employees with more than simply access to a new car. Tusker’s scheme brings together insurance, breakdown assistance, replacement tyres, servicing and maintenance within one package, helping provide greater certainty and peace of mind for employees and employers alike.

It is also important to choose a provider with a proven record of delivering schemes for organisations of different sizes and across different sectors. Introducing salary sacrifice can involve HR, payroll, finance, procurement and other internal stakeholders, as well as existing benefits providers. Established processes and experience managing these relationships can therefore be critical to a successful implementation.

Risk protection should be another key consideration. As salary sacrifice schemes can potentially be offered to a much wider employee population than traditional company cars, employers need confidence that unexpected changes in employees’ circumstances will not create disproportionate financial exposure. Tusker provides a range of protections designed to reduce risk for both the business and employee, including circumstances such as redundancy, long-term sickness and maternity leave.

Car availability is another factor to consider. Choosing a provider with established manufacturer and supplier relationships can help when securing stock and managing potential delivery delays. Access to cars already in the supply pipeline can be particularly valuable for employees who cannot wait for a factory-built car.

Finally, experience shows the importance of involving all relevant stakeholders from the beginning and establishing clear processes for managing cars throughout their lifecycle. Drawing on Tusker’s experience of implementing thousands of schemes and putting tens of thousands of cars on UK roads, bringing the right people into the process early can help ensure the scheme operates smoothly from launch and throughout its lifetime.

Looking to setup a salary sacrifice scheme with Tusker?