When it comes to making the right decision for your car fleet, there are a few things you should consider:
- What are your typical driving patterns and how are your fleet vehicles used?
- How much mileage do your drivers do daily / weekly?
- What type of routes are your fleet vehicles taking?
These key points can help determine the best suited car benefit for your employee population, as it’s likely all businesses have varied driver needs – there isn’t a one-size-fits-all solution. Often a blended car benefit solution can offer the most flexibility and fulfil the needs of your business.
In this blog, we highlight the benefits of our car fleet solutions to help you find the best option for your business. Whether your key objectives are making savings, fuel efficiency, durability or transitioning to electric, we’ll explore the options to ensure your fleet operates smoothly and cost-effectively.
Exploring fleet car solutions
Traditional petrol and diesel fleets or hybrids can still work best for certain businesses, and here at CBS, our Employee Car Ownership Schemes are the solution for these fuel types.
If you’re already on your journey to electric or looking to start the transition, then our Salary Sacrifice Cars for Electric Vehicles (EVs) is your best option.
We also offer Business Car Leasing and Car Allowance – the latter sits alongside any of our products to form a blended solution, so we can provide a car benefit for every business, every driver, every need.
If we look at the future of the fleet and consider long-term plans, all businesses will need to start considering EVs – if they haven’t done so already. As the new Labour Government reinstated the original deadline of 2030 to ban the manufacture of petrol and diesel vehicles, starting your transition sooner rather than later might be a good decision.
Here are the key benefits of an electric fleet:
– Reduced reliance on fossil fuels and lower overall fuel costs.
– Improved sustainability and positive environmental impact.
– Potential tax savings and financial incentives associated with EV ownership.
– Enhanced employee satisfaction with a modern and eco-friendly fleet.
The transition to an electric fleet will be different for every company, and it may not be right for your business to go full electric today, but there are multiple options for electrifying your fleet.
Read more in our blog: What are the Benefits of an EV Fleet Versus an ICE Fleet?
Employee Car Ownership Schemes (ECOS)
The structure of ECOS transfers the ownership of the car to your employees by selling the vehicle to them using a Credit Sale Agreement (CSA). The car is then no longer classed as a company car, so Benefit-in-Kind tax isn’t payable by your employees, and you don’t owe Class 1A NICs on the benefit either.
You collect the CSA repayment or desired contribution from your employees via payroll to cover the running costs of the car, and then pay a collective invoice from us for your car fleet.
ECOS is a popular choice for high mileage drivers. There’s an established infrastructure of fuel stations across the country, meaning fuel is readily available, which minimises concerns about range anxiety for long-distance journeys.
Technicians are generally more familiar with maintaining ICE vehicles, which could lead to faster turnaround times for repairs and potentially lower maintenance costs compared to newer EV technology.
Theres are also benefits for your business, these include:
- Creating material savings.
- Choosing how much your employees contribute towards the running costs of their car by establishing a car benefit policy that works for you.
- The freedom to choose which cars can be added to your ECOS solution, and this can be a combination of petrol, diesel, plug-in hybrid or self-charging hybrid vehicles.
To learn more about ECOS, read our guide: What is an Employee Car Ownership Scheme?
Salary Sacrifice Cars
Salary Sacrifice Cars allow you to offer a no-cost car benefit to some or all of your employees, creating tax-efficient savings on EVs. Remember, to generate savings on salary sacrifice cars, they must have under 75g/km of CO₂ emissions in accordance with the Optional Remuneration Arrangement (OpRA) rules established in 2017.
Your employees sacrifice a fixed amount from their gross salary in exchange for a company car and as a result they pay less income tax and National Insurance Contributions (NICs). A salary sacrifice car scheme is an efficient arrangement that reduces the net monthly cost of a company vehicle for your employees. With their taxable salary amount reduced, you also pay less Class 1 NICs.
This type of employee car benefit is classed as a company car though, and therefore the appropriate tax for the benefit is applicable. For your employees, this is BiK tax, but with the low BiK rate for EVs at present, this is a minimal amount. Class 1A NICs for you as the employer are also payable.
EVs are popular for employees who travel shorter distances for work purposes, those wanting a modern and eco-friendly car or those not fazed by range and charging anxiety.
There are also benefits for your business, these include:
- Helping you to recruit and retain the best talent with a go-green car benefit.
- Low Benefit-in-Kind (BiK) rates on EVs, as well as tax and NICs savings.
- The ability to include insurance, maintenance and servicing as part of the Salary Sacrifice.
To learn more about Salary Sacrifice Cars, read our guide: What is a Salary Sacrifice Car Scheme?
Business Car Leasing
Your company leases a car or a fleet of cars in accordance with the business needs. Business lease cars can be given to your employees as a company car and the appropriate tax for the benefit is applicable, or the car/s can be used as pool vehicles. Either way, a fixed monthly rental is made by the business in exchange for the vehicles.
From a business perspective, you’re in control of the cars you lease and there’s no vehicle risk as you simply hand it back when it’s best for you or when the contract ends. This type of employee car benefit is classed as a company car and therefore the appropriate tax is applicable.
Business Car Leasing is a popular choice for companies wanting traditional company cars. You can either give these to your car entitled employees as a benefit, or they can be used as pool cars. This solution can work for all fuel types.
There are also benefits for your business, these include:
- Allowing you to save your business funds for what makes you money, with CBS providing vehicle funding.
- Hassle-free motoring – no need to worry about maintenance or the value of the car at the end of the lease, simply hand it back when it’s best for you, subject to early termination fees, or when the contract ends.
- The ability to tailor everything to your individual needs, from contract lengths to mileage, and maintenance packages to insurance options,
To learn more about Business Car Leasing, read our guide: Business Car Leasing Explained
Found the perfect car solution for your fleet?
There isn’t a one size fits all when it comes to providing employee car benefits. We’ll help you determine the best set-up for your business with our full solution management that is included as standard for all our employee car benefit solutions.
Get in touch today to ensure you’re delivering a car benefit to your employees in the most efficient way for your business.