Salary Sacrifice – How it works
How to set up a Salary Sacrifice Scheme with elmo
Employer creates business account
A director or someone with appropriate authority within your business complete this short form.
The elmo business team will then provide an Explainer Deck, Manuals for both Employers and Employees and will be available to jump on a call to run through any questions.
Employer signs Admin Agreement
Once the employer is happy to proceed, elmo will send an Admin Services Agreement allowing elmo to operate the scheme on behalf of the business in accordance with the terms of the agreement.
Once the Admin Agreement is signed, we’re ready to roll out the offering to employees.
elmo will provide explainer slides, manuals and seminars to help engage staff and will also be available to jump on 1-to-1 calls with each staff member to help them choose their and provide a quote for the salary sacrifice.
Employer approves quotes
For each employee, we will run the calculations for the car they would like. The quote will show the cost of the subscription, the reduction in gross salary and by how much the take-home pay will be reduced after benefit-in-kind tax. The correct salary must be submitted to generate an accurate quote so that we can see which tax band the employee is in and how much National Insurance they pay. The quotes for each employee must then be approved by someone with appropriate authority within the business.
Employee signs Salary Sacrifice Agreement
Once their quote has been approved, each employee must sign an agreement (provided by elmo) confirming that they wish to participate in the scheme and that they will allow for a portion of their salary to be sacrificed in exchange for the benefit.
Employer books subscription
The employer will then make a booking for each approved subscription through the elmo business portal. The employee’s name and details will be given as the Main Driver and they will receive an email invitation from elmo to sign up as a user and submit information for approval.
elmo approval checks
Once the employee has created an account and submitted their driving licence and DVLA check code, the elmo team will check the details and approve them if they are eligible. This usually takes one working day.
If it’s a green light, the elmo team will then check the delivery details submitted by the employer and confirm the place and date of delivery with the employee.
Once a start date is confirmed, the employer will recive a Subscription Agreement to e-sign for the car. At this point, everything is set up for delivery!
Once the contracts are signed, everything is set for delivery on the agreed date. The employee will be contacted by the elmo team in the build-up to this and will receive a tracking link and ETA updates throughout the day of delivery.
The employee will be shown all the features of the car during the delivery handover and a detailed inspection of the vehicle will be carried out and signed for the keys are handed over.
To qualify as a benefit with HMRC, the subscription must be kept for a minimum of 12 months, after which it can be ended with 30 days’ notice.
The employee may increase the value of the benfit during this period i.e. by swapping to a more expensive car, but may not decrease the value of the benefit.
There are some instances where the car may be returned early. Please refer to the Employer Manual or contact firstname.lastname@example.org for more information.
Our salary sacrifice service is designed so we do all the work for you, including:
- Carry out all cash flow adjustments and send monthly payroll instructions to you (including NI and VAT savings)
- Provide completed P46 (Car) forms at the start and end of each subscription to be submitted to HMRC
- Provide the P11D form to be submitted to HMRC at the end of each tax year
- Provide the letter that each participating employee must sign confirming their agreement to sacrifice part of their salary in return for the benefit