Employee / Salary Sacrifice

The best of both worlds: Getting a salary sacrifice car using a cash allowance.

Why choose salary sacrifice with a cash allowance?

Being offered a cash allowance by your employer in lieu of a company car, can increase the choice of cars available, as well as the savings you’re able to make. Usually a fixed sum, drivers often look to maximise the value of their car allowance which is where salary sacrifice can be the best option.

What car options are available with a cash allowance?

A cash allowance enables you to have the freedom to choose any car you’d like, to use for work purposes. So you could buy a car outright, lease through a private arrangement, or use your employer’s salary sacrifice scheme as a benefit of employment.

However, salary sacrifice car schemes can enable the driver to make significant savings.

What’s the difference with salary sacrifice?

With the salary sacrifice scheme, you can opt for a zero-emission electric vehicle as these currently attract just 2% Benefit in Kind tax, the lowest available. This can represent hundreds of pounds for the average driver as there is no Income Tax or National Insurance applicable and enables you to maximise the value of their car allowance.

It can also be the simplest way to drive a brand new car as everything is included, much like with company cars. Insurance, servicing, maintenance, replacement tyres, as well as protections for you and your employee.


In conclusion

Using a car allowance to get a car on salary sacrifice can therefore be a smart financial move for employees who use their car for work-related purposes. By reducing your taxable income, you can enjoy significant tax savings, while also having the convenience and cost savings of driving a car for work purposes. Click here if you want to know more about the benefits salary sacrifice car schemes:

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