A salary sacrifice arrangement is an agreement to reduce an employee's entitlement to cash pay, usually in return for a non-cash benefit. The 'sacrifice' is achieved by varying an employee’s terms and conditions of employment relating to pay. Salary sacrifice is a matter of employment law, not tax law. Where an employee agrees to a salary sacrifice in return for a non-cash benefit, they give up their contractual right to future cash remuneration.
Under a salary sacrifice scheme the council allows you to lease a car under a salary sacrifice arrangement. This means that your monthly gross salary will be reduced, resulting in an initial saving on tax however your tax code may be adjusted the following tax year following your P11D submission, National Insurance and pension contributions.
You will find answers to frequently asked questions on the Tusker website, which you can access via Vivup.
We already offer some salary sacrifice schemes, such as cycle to work. In this scheme, your gross salary deductions do not affect your pension contributions, as the payments are taken out after your pension, tax and National Insurance contributions.
However, in the Tusker Car Lease Scheme they do. This means that an employee's monthly gross salary will be reduced, resulting in a saving in initial savings on tax, National Insurance and pension contributions. This has implications on an employee's future pension, for further information, please see the impact of salary sacrifice on pensions arrangement guide.
This new scheme enables you to lease a new low emission car of your choice, fully maintained and insured by the provider. You will pay for the car under salary sacrifice arrangements through a monthly gross salary deduction which means a partial saving in tax, National Insurance and pension for any employee using the scheme.
The scheme is open to both full and part time staff, however, you must meet the criteria outlined below. The car can be used for both work and family purposes. You do not need to claim mileage for your role to be part of this scheme.
This scheme supports our commitment to reduce carbon emissions and protect our environment. Tusker will offset all carbon emissions from the vehicles they supply. Our policy is that only Ultra Low Emission Vehicles (ULEV) are offered through the scheme (producing less than 75g of Co2/Km) supporting our priority of 'protecting our environment'.
These criteria will be checked by Payroll/People Services before any salary sacrifice orders are approved.
You need to be a permanent and paid employee, or, if you are on a fixed term contract, your contract of employment must be for a longer period than the proposed Salary Sacrifice Agreement.
Your gross salary after taking into account all salary sacrifice arrangements must be above the National Living Wage/National Minimum Wage for the duration of the Salary Sacrifice Agreement.
Overtime and any additional payments you may receive should not be included when you enter your gross annual salary into the online site, unless it is contractual and guaranteed.
You must have successfully completed your probationary period – with minimum six months service with LCC.
You must not have any live warnings under the LCC disciplinary policy.
You must not be subject to a formal capability review.
You must not be subject to formal consultation that could result in you being at risk of redundancy.
As part of the Tusker benefit, lifestyle protection avoids an early termination charge for employees who experience certain lifestyle events that mean they need to leave the scheme – such as a resignation, maternity/paternity, long term sickness or redundancy provided the employee has had the car for over three months. However, this protection does not apply to disciplinary or capability dismissals (or redundancy during the first three months of the lease agreement), therefore, to reduce the risk of a termination charge impacting the employee, the People Services team will check that there are no current formal HR processes that could result in a dismissal.
There is no maximum amount of your salary that you can sacrifice (so long as you meet eligibility criteria), however you should consider the following, and state benefits implications:
impact on pension (in particular if nearing retirement in the LGPS)
entitlement to contribution-based benefits like a State Pension
entitlement to earnings related benefits like Maternity Allowance
entitlement to work related payments like Statutory Sick Pay.
Other than the ‘green’ benefits for the environment, this is part of a flexible benefits scheme which continues to develop the offerings to colleagues to help access savings and discounts on their everyday expenditure. LCC do save employers NI from your sacrificed salary. This will be used to cover the costs of operating the scheme and continue to fund the continued development of further benefits, as well helping reduce pressure on staffing budgets.
Because the car is classed as a company car for tax purposes, you should claim mileage using HMRC’s advisory fuel rates.
You can only use these rates for company cars. This applies whether you use your Tusker car or another vehicle for business travel.