Editor’s Blog on a meeting with Mark Sinclair from Alphabet

MARK Sinclair is always an interesting bloke to meet.

(Mark, by the way, is the director of Alphabet, the BMW-owned multi-marque car leasing company.)

His conversation is always stimulating and I like the fact that he doesn’t come with any ‘industry’ baggage. You always get a fresh perspective rather than the ‘corporate industry’ view of what’s going on in the contract hire and car finance world. He’s also something of an Apple Mac fan and was very excited about the prospect of his new iPad which was due.

When I met Mark for lunch, he introduced me to Carly Ryan, Alphabet’s new marketing manager, responsible for maintaining the company’s high standard of communications.

Our chat quickly turned to salary sacrifice. It’s something that Mark says Alphabet has been working on for many of its larger corporate clients.

First, though, what is salary sacrifice? Let’s provide HM Revenue & Customs’ view, because that’s what counts:

“A salary sacrifice happens when an employee gives up the right to part of the cash remuneration due under his or her contract of employment. Usually, the sacrifice is made in return for the employer’s agreement to provide the employee with some form of non-cash benefit. The sacrifice is achieved by varying the employee’s terms and conditions of employment relating to remuneration. For example, an employee’s current contract provides for cash remuneration of £40,000 a year with no benefits. The employee agrees with the employer that for the future the employee will be paid cash remuneration of £34800 a year and 52 childcare vouchers a year, each with a face value of £100. This would be referred to as a salary sacrifice.”

This is from HMRC’s guidance EIM42750 on salary sacrifice.

To be honest, your business has to be sizeable to make this work – and so truthfully it’s not a business car option for many small businesses. It’s a shame really.

“Salary sacrifice can deliver savings for a business of £50-£150 per month on a company car,” Mark explains, adding: “It also provides all employees the chance to get into a modern, low emission car that they might not have otherwise.”

It does seem a shame to me, unfair even, that such a democratic form of car provision – can you imagine being able to offer all staff in your small business the opportunity to have a new car? – is not available to most SME firms. But I guess that’s where the benefits of scale really do tell – and there are plenty of other benefits smaller businesses enjoy which are not available to larger companies.

However, Alphabet is not an all big company proposition. Alphabet also provides the finance behind the BMW/MINI Partnership programme. This is run through BMW dealerships for small businesses.