Recent Success in Reducing Cost for our Business

MrInvisible1

Hi all, I'll make this quick,

We have a small business which requires a small 'fleet'  as we try to provide the vans for our engineers to go out and get the works done. Recently a friend told me about the option of using Salary Sacrifice so the lads can own their own vehicle at a discount while I can make a saving also, tried it out with one of our permanent staff and I ended up making a saving of £11,500 a year as we grow ever so slightly bigger year-by-year.

The Mrs has just called me for tea so I won't bore you with facts and figures but I suggest speaking with the below company and doing a demo with them and getting a quote. It worked out well for me, can't say for your business but 

If you have any questions let me know and I'll come back later.

https://motorsourcesalarysacrifice.com/ 

elsien

What is the benefit for your employees?

MrInvisible1

elsien said:

What is the benefit for your employees?

We pay a portion of the cost of the cars + a service fee + Insurance instead of the full amount of the vehicle so our employees end up with a discounted vehicle which is brand new. For example if we need to increase our fleet and 1 van cost £15,000, the car broker will ask us (the company) to pay £3,000 - £6,000 on the car + Service charge being 20% of procurement costs (for the sake of this example let's say their procurement costs were £18,000) + £1,500 PI insurance (this is different for each contract). The employee is offered finance on £10,000 - £12,000 at 0% interest for the first 3 years instead of taking the hit of the full price of the vehicle. In this example it's a 20% - 40% discount on the vehicle.

Cost of procuring the vehicle in-house and baring the cost of maintenance during ownership:

Van: £15,000
Import fees: £1,000 (minimum in my experience)
Delivery Fee: £350
Road Tax PA: £300 - £800 
MOT: £200 - several thousand depending on what repairs are required
Insurance PA: £1,500 - £3000 (dependant on driver)
Total cost of vehicle: £16,350
Total annual maintenance: £1,800 - £3,800
Total potential cost: £20,150

Cost of using Salary Sacrifice scheme with car broker:

Partial cost of the vehicle: £3,000 - £6,000
Service Charge: £3,600
PI Insurance: £1,500
Total cost to the company: £8100 - £11,100

Total cost to the employee:
Roughly: £10,000 - £13,000 depending on how much they sacrifice from their salary per month and whether they can pay it off before interest kicks in.

The broker also helps them to set up their insurance and works it into the monthly salary sacrifice.

A lot of the lads are young or don't have a car and need one they may opt to get a car through us or van if it suits them.

sheramber

MrInvisible1 said:

elsien said:

What is the benefit for your employees?

We pay a portion of the cost of the cars + a service fee + Insurance instead of the full amount of the vehicle so our employees end up with a discounted vehicle which is brand new. For example if we need to increase our fleet and 1 van cost £15,000, the car broker will ask us (the company) to pay £3,000 - £6,000 on the car + Service charge being 20% of procurement costs (for the sake of this example let's say their procurement costs were £18,000) + £1,500 PI insurance (this is different for each contract). The employee is offered finance on £10,000 - £12,000 at 0% interest for the first 3 years instead of taking the hit of the full price of the vehicle. In this example it's a 20% - 40% discount on the vehicle.

Cost of procuring the vehicle in-house and baring the cost of maintenance during ownership:

Van: £15,000
Import fees: £1,000 (minimum in my experience)
Delivery Fee: £350
Road Tax PA: £300 - £800 
MOT: £200 - several thousand depending on what repairs are required
Insurance PA: £1,500 - £3000 (dependant on driver)
Total cost of vehicle: £16,350
Total annual maintenance: £1,800 - £3,800
Total potential cost: £20,150

Cost of using Salary Sacrifice scheme with car broker:

Partial cost of the vehicle: £3,000 - £6,000
Service Charge: £3,600
PI Insurance: £1,500
Total cost to the company: £8100 - £11,100

Total cost to the employee:
Roughly: £10,000 - £13,000 depending on how much they sacrifice from their salary per month and whether they can pay it off before interest kicks in.

The broker also helps them to set up their insurance and works it into the monthly salary sacrifice.

A lot of the lads are young or don't have a car and need one they may opt to get a car through us or van if it suits them.

What about the benefit in kind  charged by HMRC  on the employee  for the salary sacrIfice car?

https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye#overview