Salary Sacrifice scheme proposes new cars for council staff in Scunthorpe area after business mileage rates cut - with the aim of saving public money
A scheme giving council staff the chance to buy brand new cars at competitive prices - including the cost of maintenance, insurance and breakdown cover - could be made available to many who are based in Scunthorpe and other areas of North Lincs.
North Lincolnshire Council is considering the scheme, abbreviated to SS4C, under which staff would be given the chance to buy new cars in return for giving up part of their pay - described as Salary Sacrifice.
-
'Salary Sacrifice' is a scheme offering new cars to council workers in return for giving up some of their pay
It is said the authority's finances - and the public purse - will benefit, along with staff.
As part of plans "to mitigate reductions in business mileage rates" Human Resources officers at the council "entered into dialogue" with Tusker Direct Ltd - the provider of the award-winning SS4C scheme.
Business Cards From Only £10.95 Delivered www.myprint-247.co.uk
View detailsOur heavyweight cards have FREE UV silk coating, FREE next day delivery & VAT included. Choose from 1000's of pre-designed templates or upload your own artwork. Orders dispatched within 24hrs.
Terms: Visit our site for more products: Business Cards, Compliment Slips, Letterheads, Leaflets, Postcards, Posters & much more. All items are free next day delivery. www.myprint-247.co.uk
Contact: 01858 468192
Valid until: Friday, May 31 2013
A council report says: "Salary sacrifice arrangements involve an employee sacrificing an element of their pay before tax and national insurance (NI) contributions are taken, in return for a benefit, in this instance a new car.
"The employee saves tax and NI on the amount sacrificed and the council saves the NI on the sacrificed amount.
"The council currently runs successful salary sacrifice arrangements for childcare vouchers and has done so for the Cycle to Work scheme."
Tusker has 21 "live schemes" with councils across the UK, with a further 11 "in scoping and implementation."
Under the heading Benefits, the North Lincolnshire Council report adds: "The SS4C scheme allows the council to provide employees with a new, fully-maintained and insured car at a lower cost than they could normally achieve in the retail market.
"In addition to the tax and NI savings each month, employees benefit from corporate buying power and public sector discounts. Introducing the scheme costs the council nothing.
"All servicing and maintenance of the vehicle is included in the monthly salary reduction, along with fully comprehensive motor insurance and roadside assistance."
The report adds: "Although the reductions in business mileage rates primarily affect ‘essential users’ a significant financial impact will also be felt by many ‘casual users’.
"SS4C scheme entry can be provided to the majority of the workforce regardless of whether there is a requirement for an employee to undertake business mileage.
"The greater the number of employees that enter the scheme, the greater the saving to the council.
"As a cost neutral benefit the SS4C scheme is a useful addition to the council’s retention package and would not involve any subsidy by the council."
The report concludes: "As with other salary sacrifice schemes the SS4C scheme is designed to achieve a saving for both employees and the council. Savings for the council will be dependent upon the scheme parameters set and employee take up. Administration of the SS4C scheme is minimal as the scheme is largely administered by Tusker."
Consultations have show trade unions in favour of "any steps taken to mitigate the impact of reductions in business mileage rates."
No estimated savings have been included within the report.
A decision on whether to adopt the Salary Sacrifice For Cars Scheme at North Lincolnshire Council is due to be made within the next week - at cabinet level.
What do you think? viewpoint@scunthorpetelegraph.co.uk
9 Comments
by ScunnyMike
Thursday, February 21 2013, 12:35AM
“The employee saves tax and NI on the amount sacrificed and the council saves the NI on the sacrificed amount."
When Vodafone, Amazon et al do that sort of thing it's branded as tax avoidance.
NI payments are theoretically there to make a contribution towards NHS and state pension etc. How will the shortfall created by this wheeze be made up?”
by IT_MAN
Wednesday, February 20 2013, 11:58PM
“But in a private company the value paid for the car would be taxed unless a pool car. This is costing every taxpayer as less Income Tax and NI being paid into the goverment coffers, getting as bad as MP's fiddles.”
by hugh_jarce
Tuesday, February 19 2013, 1:54PM
“The cost to the enviroment in producing a new car is far greater then actually driving it”
by Shinya
Tuesday, February 19 2013, 1:05PM
“Oh for goodness sake it's a very common large employer concept that's gone on since time began for the motor car. It's a way of purchasing new vehicles at an affordable rate which in turn benefits everyone especially the environment.”
by englander61
Tuesday, February 19 2013, 12:30PM
“hugh_jarce and buffering must agree with your comments but it might justify those traffic lights out side of deadwood house that stop traffic flow for no reason nine out of ten times , lol”
by hugh_jarce
Tuesday, February 19 2013, 10:43AM
“I thought this council was all in favour of getting people out of cars and on to cycles after all those unwanted cycles paths they built or were they just for the plebs?,hypercrits.”
by SteveBlock
Tuesday, February 19 2013, 10:14AM
“Good idea! Creates savings in national insurance for both parties, which can be channeled into other areas of the council budget! The car's residual value is not relevant as the cars are leased and if the individual is happy to pay a monthly commitment and accept the payment of a deposit (usually around £500) every renewal, and keep the car in good nick and within mileage allowances, then the scheme is a good thing for all. I would suggest that one or two people need to do a bit of research before posting comments, which show them to be out of their depth on this subject! Other firms may also be able to adopt this, so perhaps people may want to talk to their employers if they think it is better than going out and buying a car. By the way, I don't work for the council or a car leasing company!”
by Porkmiester
Tuesday, February 19 2013, 8:49AM
“The only winners in this are the council & Tusker. Don't for one minute think that both are in business to save you money. You pay the price for a new car, servicing, insurance & maintenance in return for a salary cut & within 1 year your car is worth half its original value! then you're stuck on a lower salary. Roll-up Roll-up this way please ladies & gentlemen come into my parlour & speak with these nice honest car salesmen.”
by buffering
Tuesday, February 19 2013, 8:14AM
“WOW – Are this lot for real?
This really is a complete urine take, accept austerity they say, accept cuts in benefits they say, accept having your disability allowance revalued they say, but don't worry, cause the person sorting your issues is poncing around in a brand new car..
I tell you one thing, if things continue the way they are I can see a repeat of the summer 2011 problem surfacing again.”