Following the announcement in November's Autumn Statement that salary sacrifice schemes would see some changes, HMRC have provided further clarification on its plans for protecting vehicles ordered before 6th April 2017.
HMRC have confirmed that vehicle orders "contractually agreed" before this date will have their income tax benefits protected for 4 years. It was previously thought that vehicles had to be delivered before this date, but HMRC have said that if an employee orders a new car in March 2017 and it's not delivered until August 2017, then the benefits will be grandfathered.
This distinction is important as vehicle lead times would typically have meant employees who order a vehicle now would lose out on the income tax benefits - with this clarification employees can order a salary sacrifice vehicle up until the end of March and still reap all the benefits, provided it will be delivered before August 2017.
In other developments, there was further clarification that unavoidable contract changes out of the control of the employee (for example, mileage changes or a rise in insurance premium) made after 5 April 2017 will not affect the grandfathering. If the change is controlled by the employee then the protection will be lost.
The SimplyDriveIt Salary Sacrifice scheme offers your employees the ultimate benefit: a brand new car! All they have to do is add fuel, as the fixed monthly cost includes insurance, servicing, MOT, road tax and breakdown cover, with benefits the high street can't offer such as corporate discounts, tax savings, no credit checks and no large upfront fee.
Talk to our team for a free consultation about implementing SimplyDriveIt in your business.
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