Article date: 8 December 2010
Aviva is launching a bespoke insurance policy for businesses which operate an employee salary sacrifice car scheme.
The UK’s largest insurer has developed the offering, modelled on its Fleetwise commercial insurance product for corporate fleets, in response to the growing popularity of companies rewarding staff with tax efficient employee benefits.
Aviva can now provide a block insurance package to companies operating the scheme, with no limit on the number of vehicles covered by the policy. The product has been developed following feedback from all those involved in the supply chain, including leasing companies, brokers and businesses themselves.
Mark Keavney, development manager - commercial product development at Aviva, said: “The salary sacrifice scheme allows employers to offer tax benefits to staff when the employee leases a new vehicle over a number of years.
“In the current economic climate, employers are looking for new ways to reward staff, and flexible benefits such as dental care, nursery vouchers and salary sacrifice vehicle schemes offer ways to retain staff without raising business overheads.
“Aviva has conducted extensive research to understand the requirements of businesses for a successful salary sacrifice car scheme to be implemented. We have developed a dedicated insurance product we believe is unlike any on the market. Although flexible for any size or type of business, the scheme is likely to be most attractive for companies with large fleets, whether FTSE-listed, privately-owned or local authorities.”
In a salary sacrifice car scheme, the employer receives the vehicle from the leasing company, but only pays net of tax rather than full price. This saving is passed on to the employee, who receives a brand new car at a better price than if they went independently to the leasing company.
Keavney continued: “Payment is taken directly from the employee’s salary, and is usually contracted over two or three years. The employee saves on national insurance and income tax up to the value of the scheme.
“Servicing, maintenance and insurance are all included, and if an employee chooses a car with low CO2 emissions, the vehicle normally provides minimal BIK tax, enabling further tax savings.”
Aviva’s insurance offering launches this month. For more information about salary sacrifice vehicle insurance from Aviva, brokers can visit www.broker.aviva.co.uk.
For further information, please contact:
Patrick Chester at Staniforth on 0161 919 8011 or Adam Cracknell from Aviva’s press office on 01603 684224 / 07800 692909.
Notes to editors:
Aviva is one of the world's largest insurance groups* with 53 million customers worldwide and 46,000 employees.
Aviva’s main activities are long-term savings, fund management and general insurance, with worldwide total sales of £45.1 billion and funds under management of £379 billion*.
In the UK, Aviva takes care of its 19.2 million customers by helping them look after their future, protecting what’s important – from their health to their homes, their cars to their business – and saving for the future.
Aviva has a 10.5%** share of the UK life and pensions market and insures one in six homes and one in 10 cars in the UK. It is also one of the oldest UK insurers, with a heritage stretching back more than 300 years.
RAC, which is owned by Aviva, provides breakdown and insurance services for individuals and businesses and has around seven million customers.
Aviva is carbon neutral worldwide, and is ranked in the top 10% of socially responsible companies globally by the Dow Jones Sustainability World Index. In the UK, Aviva invested £3.8 million into local communities in 2009. Read our corporate responsibility report at www.aviva.com/cr.
Aviva’s global Street to School programme is working in partnership with Railway Children in the UK to get children living on the streets back into education and everyday life. Find out more at www.aviva.co.uk/street-to-school.
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* based on gross worldwide premiums at 31 December 2009
** Source: ABI data released August 2010