Salary Sacrifice Leasing - Who owns the car
Discussion
We are a small business and we'd like to offer salary sacrifice leasing for EVs for our staff. Our staff churn is incredibly low, but we still don't want the risk of being left with a long term lease if a staff member leaves having previously taken the offer of a lease.
The providers seems to skirt around this issue, but are there any where there is an allowance for them to take the car back part way though a lease, in the event an employee leaves?
The providers seems to skirt around this issue, but are there any where there is an allowance for them to take the car back part way though a lease, in the event an employee leaves?
ywouldi said:
We are a small business and we'd like to offer salary sacrifice leasing for EVs for our staff. Our staff churn is incredibly low, but we still don't want the risk of being left with a long term lease if a staff member leaves having previously taken the offer of a lease.
The providers seems to skirt around this issue, but are there any where there is an allowance for them to take the car back part way though a lease, in the event an employee leaves?
It will be in the contract document. Better to read that than ask internet strangers.The providers seems to skirt around this issue, but are there any where there is an allowance for them to take the car back part way though a lease, in the event an employee leaves?
https://fleetelectric.co.uk/salary-sacrifice/faqs
Once you have chosen your car, your employer will enter into a Contract Hire agreement for that car and will then provide it to you under the salary sacrifice arrangement. The car is classed as a “company car” for tax purposes and will be treated as a “benefit in kind”.
I can transfer my scheme but only if the employer I'm leaving for also runs a scheme. We do have a clause in the contract about payments if we leave but it only covers the first 3 months after taking delivery. If I leave now the company pick up the tab of any early repayments.
Even if I lose my license the company will still take the car back and take the hit.
Even if I lose my license the company will still take the car back and take the hit.
Hi - wanted to chime in on this one as its part of my business.
the responsibility for the Lease rest with the employer like any fleet asset. If the employee leaves you are responsible for making the payments for the vehicle or paying the early termination fee to the lender to return the vehicle early.
The schemes we offer do have an indemnity product option to cover the early termination fee so should the employee leave of their own accord you can cover yourself for the early termination payment. If you make the employee redundant or fire them though it's still on the employer as that's the employers action not the employees.
Some Business do build provision into the contract to deduct costs from the employee but we don't get involved in that as employment contracts isn't our area.
As noted earlier its treated as a benefit in kind for the employee so they need to pay the BIK element on that car as well as the salary sacrifice for the lease product, usually a small amount on EV's of course.
You also have the consideration of insurance, do you want to take the offering from the supplier or insure the asset yourself etc.
the responsibility for the Lease rest with the employer like any fleet asset. If the employee leaves you are responsible for making the payments for the vehicle or paying the early termination fee to the lender to return the vehicle early.
The schemes we offer do have an indemnity product option to cover the early termination fee so should the employee leave of their own accord you can cover yourself for the early termination payment. If you make the employee redundant or fire them though it's still on the employer as that's the employers action not the employees.
Some Business do build provision into the contract to deduct costs from the employee but we don't get involved in that as employment contracts isn't our area.
As noted earlier its treated as a benefit in kind for the employee so they need to pay the BIK element on that car as well as the salary sacrifice for the lease product, usually a small amount on EV's of course.
You also have the consideration of insurance, do you want to take the offering from the supplier or insure the asset yourself etc.
Any providers you deal with certainly should not skirt around this issue. ET for leavers is a very common component of modern sal sac schemes. The leaseco owns the asset not you, but you as a business are on the hook for remaining lease payments unless you sort an ET model/insurance with the leaseco (they should offer this).
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