Myth 2: “Prices go up for all employees”
Tusker modelling shows more than half of forecasted 2017 orders would not be affected by the new rules, either because drivers will opt for a ULEV or because the drivers will already be paying more in BiK than the salary being sacrificed. For the rest, over a quarter will see an average increase of just over £2.44 per month. In the approximately 11% of vehicles where there are larger increases we would expect drivers to simply opt for another car which isn't affected to anywhere near the same degree.
Myth 3: “There are no longer any financial benefits for employees”
There are still huge savings to be made with National Insurance savings, pension savings (where applicable), manufacturer discounts and corporate finance rates. However, cost savings are not the main reason that people choose to drive a brand new car from Tusker. In a recent Tusker survey, only 3% chose the scheme because of tax savings and 77% chose their car because of the all-inclusive, hassle free package which was great value against other methods of driving a brand new car.
Myth 4: “There are no longer any National Insurance savings for employees”
This is one of the biggest misconceptions. The truth is that NI for employees is NOT affected by the new rules. The Government has been clear that NI savings remain for all employees.
Myth 5: “It is more expensive for employers to run salary sacrifice schemes”
All Tusker schemes are free to implement, and there is still no financial cost to implement or run a salary sacrifice car scheme. It is true that employers will no longer save money when their employees choose a car on the scheme but it won't cost employers any more than if they had opted for the cash.
Myth 6: “Salary sacrifice will be abolished in 2021 so it’s not a long-term solution”
The 2021 date has caused confusion but this simply refers to when the rules will apply to renewals of existing schemes. The Government has always applied a ‘grandfather clause’ to tax rules in order to maintain the status quo for existing contracts.