Salary sacrifice started life as a benefits incentive - a way to streamline tax effectiveness for employers and employees alike. It offers financing for company cars by giving the employee the option to sacrifice a monthly element of his/her salary in exchange for vehicle payments. These payments are subtracted before tax, and while they accrue Benefit-In-Kind tax demands (BIK) on the vehicle payments, the amount of BIK paid is normally less than the amount of NIC and income tax saved.

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