The company car has been an integral business component for decades, but these days businesses are facing a number of issues have raised questions over its traditional role.
To start with, many organisations are realising that in the age of the information superhighway, there is a reduced the need to travel up and down the UK’s highways and byways. Furthermore the cost of administering company cars has made many companies less eager to offer this ‘perk’ of the job; while employees are increasingly reluctant to take up the offer because of the, potentially high, Benefit-in-Kind (BIK) tax.
For employees who only require the occasional business trip, there are other alternatives such as pool cars, car sharing or even public transport. But ultimately for employees who need to travel from time to time, paying them a fixed mileage allowance for the use of their private car is fast becoming the most convenient option in terms of both administration and cost.
The rise of the grey fleet
Slowly but surely, many companies are now paying mileage rates to employees who use their own car for business. It not only makes good financial sense (assuming that employees aren’t covering 35,000 miles a year), but many employees are more than happy to use their car for business.
However there are a number of issues relating to the grey fleet that need careful management; which is where the Salary Sacrifice scheme can come to your assistance. Salary Sacrifice, in a nutshell, is an arrangement whereby an employee gives up part of their salary in return for a non-cash benefit; in this case a brand new car.
Below are just some of the many reasons why Salary Sacrifice can help your organisation to make your grey fleet leaner, cleaner and ultimately greener.