Salary sacrifice is when you swap part of your monthly salary before tax in return for a car of your choice. Your gross pay reduces for the period of the lease contract which means you pay less Income Tax, National Insurance and Pension contributions. You can join the scheme under salary sacrifice with low or zero business miles and because of the savings, it is the cheapest option for most people.
Each month car payments are taken from your net salary, so after tax. This means you pay the same tax and National Insurance contributions as you do now but your pension contributions are not affected. Any employee can join or switch from a salary sacrifice arrangement during their contract if they have a lifestyle change. Salary deduction may be more suitable for lower paid employees.
You pay a fixed monthly cost for your car and return it at the end of the contract. Under this personal arrangement, you make payments by direct debit and your take home pay does not reduce. You do not pay company car (Benefit in Kind) tax. Servicing, maintenance, breakdown and insurance are optional. PCH could suit employees who would like a second car or are retiring or leaving the organisation within three years.
If your job requires you to travel, you will also be paid a business allowance including fuel costs, on submission of a monthly mileage return.
Knowles Fleet is a private limited company formed in 1990. We have been at the forefront of the management of lease car schemes since their introduction into the National Health Service in 1987. Through our long association with the NHS and local authorities, we have established ourselves as specialists in the design and management of public sector car schemes.
We provide a fully inclusive management service, embracing every aspect of fleet management. Our service focus is on cost reduction and the continuous improvement of our clients’ fleet and travel arrangements. Our experience is gained from the implementation and management of medium and large fleets throughout the UK.
Knowles Fleet can provide a whole host of services from Lease Car Management, all the way to Fleet Insurance. You'll also have access to a large number of leasing companies, allowing you to make sure you get the best choice of vehicles that will suit your needs.