Salary sacrifice car schemes are growing in popularity for employees with no entitlement to a company car or a cash alternative. What's more some employers are introducing the salary sacrifice option in place of company car schemes. David Hosking, chief executive of Tusker (who work in partnership with CPC Drive), a leading provider of schemes with more than 260 currently being managed, explains why ULEVs are a particularly attractive salary sacrifice option.
"Ultra Low Emission Vehicles (ULEVs) work extremely well as salary sacrifice cars. Salary sacrifice works by eligible employees 'sacrificing' part of their salary in exchange for a company car.
Savings are generated because the employee is no longer liable for income tax on the proportion of salary they sacrifice. Instead, they are liable for benefit-in-kind tax on the company car.
As benefit-in-kind tax works on a sliding scale based on the CO2 emissions of each vehicle, ULEVs attract the very lowest tax liability of just 5%. When Tusker's purchasing power on the vehicle, maintenance and insurance are also factored in, along with the savings on fuel, drivers can save many hundreds of pounds every year.
Due to salary sacrifice car schemes' increasing popularity, boosted by government policy which keeps related taxes very low, manufacturers have responded with an ever-expanding range of low emission models to meet all needs and pockets; from the family-friendly run-around to the top-of-the-range supercar.
It is no surprise then that nearly half of all cars ordered through Tusker's Salary Saving Car Scheme have a CO2 of less than 100g/km and 5% of those are ULEVs with CO2 of 75g/km or less.
The most popular ULEV on Tusker's fleet, accounting for over half of total orders, is the versatile Mitsubishi Outlander which appeals to drivers looking for a bigger family car. This is followed by the Toyota Yaris which currently makes up 20% of ULEV orders
Tusker works hard to promote the benefits of ULEVs to its customers, and has developed a dedicated microsite packed with information to educate customers on these low emission vehicles, including dispelling common myths, tools to assist in determining if it's right for an individual, cost and CO2 comparison tools, an educational video, a frequently asked questions section and charging information.
Employers also have a role to play. Installing charging points in the office car park is essential to encourage employees to adopt ULEVs and drive down the company's carbon footprint.
Choosing the right ULEV for each individual driver is critical to their success. Different types of low emission vehicles work best under different sets of circumstances. Drivers do need to do some research when first looking into these vehicles and fully understand their journey profile.