Structured Employee Car Ownership
SECO is a way of offering a company car scheme but with savings to both employer and employee.
What are the benefits of SECO?
The main objective of a SECO scheme is to deliver cost savings to the employer whilst retaining control of the fleet policy. Benefits of the scheme include:
- potentially significant savings for both employers and employees over some traditional company cars
- Retain control of the fleet policy including vehicle choice and employee grades
- BIK is no longer payable therefore employees can save
- All cars are brand new, come fully maintained and include the benefits typically associated with a company car
- A balanced and well structured scheme helps to attract and retain employees
What is SECO?
With traditional company car schemes if the vehicle is made available to the employee for private use, in addition to business use, then BiK will be payable. However increasing Benefit in Kind has seen employees opting out of employer schemes and choosing a cash allowance alternative.
In a SECO scheme the employee is the owner of the vehicle from day one, so BiK is not payable on the car benefit itself.
How does SECO work?
A scheme is structured to look and feel like a traditional company car scheme. The key difference is that the employee is signing a Credit Sale Agreement (CSA) which transfers title in to their name.
The employer retains control of the fleet policy so can decide what vehicles are made available to employees based on their profile and grade.
The costs are covered using a combination of:
- Approved Mileage Allowance Payments (AMAPs)
- Employee contribution towards the car
- Employer top-up (if required)
Is SECO right for my business?
At Ogilvie we work with our clients to determine what scheme will work best for them and their employees.
Typically a SECO scheme will work best where:
- An employee is driving more than 4,000 business miles a year
- An employee is a higher rate tax payer
- A car policy includes diesel or petrol models
Our modelling software allows us to work out the most appropriate form of funding for your fleet, based on individual vehicles and driver needs.