Comment: LeasePlan UK on the ACFO’s report on the salary sacrifice scheme
From Matthew Dyer, Commercial Director, LeasePlan UK
The recent report by ACFO regarding the appetite for salary sacrifice schemes was interesting. It should, however, be put into context in our view, as by purely focussing on Fleet Manager research it has the potential to misrepresent the true scale of interest.
Why is salary sacrifice so attractive for employers in today’s market? There are three main reasons.
First, the potential tax savings for both employee and employer are significant. Second, faced with severe payroll pressures, it can give employers an edge in attracting and retaining talent. Third, it can be an effective way of removing the problems associated with ‘grey fleet’ vehicles and getting employees out of their own, often older, high emissions vehicles and into new low emission cars.
Consequently, LeasePlan’s view of salary sacrifice is that it should not be thought of as an alternative to the traditional fleet model. Instead, our approach with SalaryPlan is an attractive flexible benefit reaching out to a community broader than established company car drivers.
This does not mean that we advocate that salary sacrifice is a model which is appropriate for all organisations – far from it. Every organisation is different, with a different employee base, a different culture and different operational needs. Understanding if salary sacrifice will work for the organisation and how best to shape the scheme can be a big but crucial first hurdle.
This is why, with SalaryPlan, we have made the investment in developing a robust feasibility methodology in conjunction with an intuitive online driver interface. Alongside, LeasePlan offers consultancy support that can guide organisations smoothly through due diligence of the regulatory, HR and driver communication matters essential for the successful implementation of salary sacrifice programmes.
As a consequence, we are finding that interest in our SalaryPlan product is rapidly building, mainly from HR & Finance teams who want to understand how it may contribute to the increasing need to address the seemingly conflicting requirements of controlling and cutting costs whilst retaining and attracting good people.
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