employee benefits in a post consultation world

Salary Sacrifice your way to a new car today

www.fleetevolution.comSalary Sacrifice your way to a new car today

www.fleetevolution.com

Salary Sacrifice Scheme Overview



What’s in todays session?

AgendaWhy have benefits?

Why was salary sacrifice reviewed?What will change?

Focus on employee car schemes

Close

Andrew Leech

this slide is just setting the scene, ask if there is anything specific they want to get from the meeting



WelcomeAward Winning Salary Sacrifice Experts

Employee Car Scheme Specialist

Min 20 employees (lite scheme)

Min 200 – 10,000 employees (full scheme)

Fully managed risk free schemes,

Fully inclusive costs

Andrew Leech

key points to stress, every other supplier started life as a normal contract hire business, we were set up to provide salary sacrifice car schemes that overcame 2 key problems, they should be open to employers regrdless of size and be as simple to implement as childcare vouchers with as little risk to the employer



WHY HAVE BENEFITSSection 1



Why have benefits? The cost of replacing a ‘leaver’ is estimated at £25,000!

Most employees stay at companies where they feel valued

Employee benefits can increase productivity and reduce cost

Help make you an employer ‘of choice’

Benefits don’t have to cost money

The best benefit offerings evolve as your employees do

Setting the Benefit Scene

Andrew Leech

just really stressing that sal sac cars are still not well known, when they recruit it's something others pitching the same people will not offer



Salary Sacrifice OverviewSalary Sacrifice or salary ‘exchange’ is effectively a way of exchanging cash salary, pre tax for goods or services. Thus saving the tax and NI and possible other savings. In essence salary sacrifice allows employees to define their own package, subject to your rules.

Typical savings at the moment are between 20% - 45% on everything from childcare to ipads.

The savings are generated by a mixture of the following, this varies by benefit and employer;

Volume discounts on list price

Low cost of finance leveraging employers rates

VAT reclaim

Employers NI saving

Tax Saving

Employees NI saving

However some benefits are already subject to a ‘Benefit in Kind’ tax which erodes these savings

Andrew Leech

prob skip past this



What Employees Want

Keeping Staff Happy Isn’t All About Benefits

43% of employees claimed that enjoying their work was a

major motivator in staying put. Job security and good

colleagues were also named as reasons why employees would

not jump ship.

Andrew Leech

again prob skip this



Why has salary sacrifice been reviewed?Benefits all?

Benefits just employees??

Benefits tax evasion only??

Estimated

£5 billion cost to

treasury!



What will change? Childcare vouchers, Payroll Giving, Pensions, Cyclescheme and cars below 75g/km CO2 ‘ringfenced’ with no changes All other salary sacrifice arrangements will attract a benefit tax (BIK) equivalent to tax saving

This will wipe out all the tax savings from salary sacrifice but (where applicable) other savings will remain.

Deadlines/GrandfatheringAny existing salary sacrifice arrangement or new arrangement implemented prior to April 6th will continue on the current rules until April 2018

For more polluting cars, accommodation and school fees entered into (ordered) prior to April 6th rules will not change until April 2021

For schemes such as cars that have always had a corresponding benefit in kind charge any changes will be minimal

Andrew Leech

use the example, an employee earning £20,000 with £10,00 expenditure, if they could pursuade their employer to pay all those expenses from gross salary the employee would pay no tax! Meaning instead of taking home less that £400 they would take home £800. Bad news stress only certain schemes are eligible for salary sacrifice, such as ours



SO WHERE ARE WE NOW? Section 2



Dead? Or Evolving?Typical components of salary sacrifice savings

Up to 30% volume discount20% tax saving12% employee NI saving13% VAT saving5% cost of finance+ convenience+ time savings

Andrew Leech

just focus on different areeas and point out the employer saving



Dead? Or Evolving?Typical components of salary sacrifice savings

Up to 30% volume discount20% tax saving wiped out by BIK12% employee NI saving13% VAT saving5% cost of finance+ convenience+ time savings

But employers NI savings removed, portals beware

Andrew Leech




Adaptable and Inclusive

Simplicity is the Key

Part time staffLiving wageContractors

Established Staff less than 10,000 business miles

High mileage essential users

Salary Sacrifice eCosCarffinity

Plus fleet management and grey fleet management too!

Andrew Leech




What is a ULEV?An ‘Ultra Low Emission Vehicle’ is one emitting less than 75grams of CO2/km driven

Currently 200 on our scheme, 500 expected by end of year

Electric cars with 200 mile range +

£20,000 to £80,0000



Our Engagement Strategy

Pre launch teasersLaunch with product3 month refreshEshotsCatch upsSocial MediaProactive callsPayroll Inserts+Parking season ticketsTrain season ticketsAffinityEcos



Did You know?• In an IPP survey the company car was seen as the most attractive benefit by 25-45 year olds?

• Salary sacrifice car schemes have now been introduced by 15% of employers who have a flexible

benefit offering (1,000 employee plus)

• 82% of adopters have never had a new car before

• The typical saving is 30% compared to retail

• The fastest car on our scheme does 0-60 in less than

3 seconds

• Adopters of salary sacrifice car schemes

report reductions in CO2 of 42%



The Perfect Company?

Employees Earning above £20,000

Above Average Retention

Open to Heavy Promotion



WHAT MAKES US DIFFERENT

Section 3



Why Choose Fleet Evolution?

Every other supplier puts the emphasis on you making the scheme a successWe put the emphasis on us, we take all responsibility for the schemes

success

Admin• Low admin• No FCA compliance needed

Risk• No termination risk• No risk of issues around periods of no pay

Costs• No set up cost nor minimum volume• No marketing cost or admin



SALARY SACRIFICE CARSSection 4



Maximise your Savings

You can save up to half your motoring costs by taking a salary sacrifice car, but

this saving is eroded by “Company Car Tax”, out simply the higher to CO2 the

lower the saving and indeed some more polluting cars may be better taken as

a personal deal…get the picture?



Sub 50

50-100 g/km

100-120 g/km

120-130 g/km

45% Saving

33% Saving

25 % Saving

12%

Saving

Electric cars, Plug in Hybrids, Nissan LeafMitsubishi Outlander, BMW i3

Full Hybrids, Bluemotion, Econetic ModelsLexus CT/IS Hybrids, VW Golf, Ford Fiesta

Audi ‘Ultra’, BMW ‘Efficient Dynamics, Mercedes ‘Blue Efficiency”

Some SUV’s/4x4’s, BMW 5 Series, Audi A5

CO2

Typical Savings (Compared to Retail)

Typical Cars (in Band)



Sub 50

51-75

76 – 120 Co2

120-130 g/km

45% Saving

33% Saving

20 % Saving

12%

Saving

Electric cars, Plug in Hybrids, Nissan LeafMitsubishi Outlander, BMW i3

Full Hybrids, Bluemotion, Econetic ModelsLexus CT/IS Hybrids, VW Golf, Ford Fiesta

Audi ‘Ultra’, BMW ‘Efficient Dynamics, Mercedes ‘Blue Efficiency”

Some SUV’s/4x4’s, BMW 5 Series, Audi A5

CO2

Post April orders (Compared to Retail)

Typical Cars (in Band)



Benefits to Employer• Tailored to your requirements

• Protection against risk

• Fully managed

• NI Savings

• Increased level of applicants

• Improves retention

• Improves productivity

The most ‘visible’ of all flexible benefits



Questions?

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