MAXXIA’S FLEXIBLE SOLUTIONS FOR ENHANCED CAR BENEFITS
Competition for skilled and experienced staff has never been more intense. As a result, it has become increasingly important to offer benefits that will attract and retain the best talent. Employer provided cars remain one of the most enticing benefits for employees.
At Maxxia, we understand that this goes beyond the provision of perk and business need company cars. That’s why we have developed a whole range of solutions, that give all employees the opportunity to drive a brand new car at a discounted price.
Our lease car scheme solutions are not one-size-fits-all, we work in partnership with our clients to design employee car benefit schemes that fit the profile of their employee base and meet their business objectives.
BENEFITS OF MAXXIA’S EMPLOYEE LEASE CAR SCHEMES
WHY CHOOSE MAXXIA FOR YOUR EMPLOYEE CAR BENEFIT SCHEME?
- Multiple lease car scheme solutions and a flexible approach mean the right employee benefit scheme design for your business
- Enhanced recruitment and retention performance at no additional cost
- Maxxia takes care of all scheme administration and driver interaction
- Exceptional employee car benefit scheme expertise and experience
Our approach to employee car benefits is different. If a single solution isn’t right for your employee base, we have the flexibility to manage a range of options including personal contract hire and various types of salary sacrifice. By customising the employee car benefit scheme design we’ll deliver a benefit programme that meets your specific business objectives.
HOW DO MAXXIA’S EMPLOYEE BENEFIT CAR SCHEMES WORK?
Legislative changes over the last few years have made some types of employee lease car scheme, such as salary sacrifice, less advantageous to some organisations and for certain vehicles. While they can still work very well for some businesses, we recognise that a more flexible approach is required so that a broader range of needs can be met.
To accommodate this, we have developed a range of employee car benefit solutions including:
- Personal Contract Hire
- Salary Sacrifice
- Lifestyle Lease
By carefully assessing the needs of the business, and the profile of its employees, we can select the best solution, or combination of solutions, to optimise the car benefit scheme.
MAXXIA’S EMPLOYEE CAR SCHEME SOLUTIONS
Whatever the lease car scheme solution, Maxxia ensures that the administrative burden to the client is as light as possible by taking care of the entire operation of the scheme. Once the scheme has been designed and implemented, we work directly with individual employees to find the right vehicle and finance solution for them. This is a brief summary of how the process works:
- Eligible employees choose online from a huge range of cars, with expert advice from us whenever required
- Employees complete the relevant agreements depending on the finance solution selected
- The car order is placed and we stay in touch to confirm a delivery date
- The car is delivered and payments are made, either through payroll deductions or directly from the individual’s bank account depending on the funding solution
- Employees contact us for all car related needs including maintenance and breakdown
- At the end of the contract, the vehicle is handed back and a new one can be chosen under a new agreement
PERSONAL CONTRACT HIRE BENEFITS
Personal contract hire is a great way to offer an employee benefit car to your whole employee base. Payments are made by direct debit directly to Maxxia, so there’s almost no administration involved and it’s free of charge to Maxxia clients.
- Employees get to choose from a huge range of new cars at great prices
- Offers extend to employees’ friends and family members
- Option to include all servicing and maintenance means fixed cost, hassle free motoring
- Employees get to drive a brand new car every 2,3 or 4 years
- Reduces ‘grey fleet’ health and safety issues
- Fully managed and administered by Maxxia at no cost
As the agreement is purely between the individual and Maxxia, and income tax will already have been deducted from their salary, there’s no Benefit-in-Kind (BiK) tax liability.
SALARY SACRIFICE BENEFITS
Salary sacrifice provides employees with access to new cars with corporate levels of discount. Payments are deducted from employee’s gross salary and Maxxia takes care of everything else.
- Employees benefit from the organisation’s corporate vehicle discounts
- Encourages employees to choose low emission cars – improving environmental performance
- Potential tax savings to the business
- No issues of disposal of the car, or risk of future value
- Reduces health and safety issues associated with private car use
Since the changes to Optional Remuneration Arrangements (OpRAs) in 2017, employees are taxed on the higher of either the amount of cash deducted from their gross salary, or the Benefit-in-Kind (BiK) value of the car that they select. However, if employees select an Ultra Low Emission Vehicle (ULEV – cars emitting 75g/km CO2 or less) this rule does not apply and significant tax savings are still available.
LIFESTYLE LEASE BENEFITS
Lifestyle lease provides employee car benefits with the added bonus of total portability. Agreements are with employees and, should they choose to leave the organisation, the contract and car goes with them. This means no risk to the employer of being left with unwanted vehicles and that employees get to keep their current car.
- Cost neutral to the employer
- All administration taken care of by Maxxia
- Corporate levels of discount available on cars
- Hassle free, fixed cost motoring including servicing, maintenance and tyres
- The option to buy the car at the end of the contract term
As with Salary Sacrifice, the changes to Optional Remuneration Arrangements (OpRAs) have reduced the tax advantages available. But these can still be accessed by selecting an Ultra Low Emission Vehicle (ULEV – cars emitting 75g/km CO2 or less).
ENVIRONMENTAL IMPACT REDUCTION
All of Maxxia’s employee car benefit schemes put drivers behind the wheel of new, efficient vehicles. This means that business journeys have a reduced environmental impact through lower CO2 and other pollutant emissions.
Beyond this, salary sacrifice schemes now actively encourage the adoption of Ultra Low Emission Vehicles, such as electric and plug-in hybrid cars through their tax treatment. For many organisations, this is seen as an additional reason to introduce them.
Maxxia can also set up employee benefit car schemes that follow an organisation’s own vehicle policy. This could mean restricting the types of vehicle available or setting a maximum limit on the level of emissions.
REDUCED GREY FLEET RISK
Use of private cars for business journeys creates problems for employers. They have little or no control over the suitability of the vehicle, or how well it has been maintained. Provision of company cars goes so far in reducing these risks, but many business trips are carried out by employees not eligible for a company car or who may have opted out.
By providing employee car scheme options such as personal contract hire, or salary sacrifice, employers demonstrate their desire to provide access to new, properly maintained vehicles to the maximum number of employees. This reduces the number of journeys carried out in private vehicles and the duty of care related risks.
Top Frequently Asked Questions
Contract hire arrangements mean that individuals pay for their car by direct debit from their bank account. Salary sacrifice schemes deduct the payments from the employee’s gross salary. The latter can deliver tax advantages providing the right type of vehicle is selected.
This depends on a number of factors. The organisation can choose to limit the benefits to certain employees or open them up to everyone. For personal contract hire, this can even be extended to friends and family.
For salary sacrifice, if an application results in the level of salary falling below the lower earnings threshold for National Insurance contributions it will be refused. This is to prevent adverse effects on entitlement to statutory benefits such as sick pay, maternity pay and state pensions. Employees will also be unable to participate if this would result in their salary falling below the National Minimum Wage and / or National Living Wage during the period of the agreement.
For personal contract hire, affordability criteria will need to be met for each individual application.
