Salary Sacrifice Products

CAR PARKING SCHEMES

Under current tax legislation, employers are able to provide car parking spaces for their employees, at or near to the workplace, without the employee paying any income tax or national insurance on the cost of that space.

The Smart Parking Scheme works within the legislation, enabling employees to save up to 50% of their parking costs. When operated via salary sacrifice, the parking costs are met by the employer but recovered from the employee by way of deductions from their gross pay. This gives rise to income tax and national insurance savings for the employee, as well as national insurance savings for the employer.

The scheme lends itself perfectly to situations where employees are purchasing season tickets or permits. The scheme can also be used to good effect where employees currently make a contribution to their employer for use of a space.

Tax Schedule

Employee Savings:	Basic Rate: Tax Payer @ 22% NI Payer @ 11%	Higher Rate: Tax Payer @ 40% NI Payer @ 1%
Annual Cost of Parking	£1,000	£1,000
Annual Cost to Employee in Scheme (*)	£570	£502

(*) Assumes VAT is charged by the car park operator and reclaimable in full by the employer

For more information on how the scheme operates, please download our Guide for Employers.

If you would like to set-up a scheme, please contact us on the number above.