General Note
NHS Fife acknowledges and agrees with the importance of regular and timely review of policy statements and aims to review policies within the timescales set out. New policies will be subject to a review date of no more than 1 year from the date of first issue.
Reviewed policies will have a review date set that is relevant to the content (advised by the author) but will be no longer than 3 years.
If a policy is past its review date then the content will remain extant until such time as the policy review is complete and the new version published, or if national policy or legislative changes are made
1. FUNCTION
1.1 NHS Fife is committed to supporting the health, wellbeing, and financial security of its staff while advancing its sustainability objectives. This policy outlines the implementation and operation of the Electric Vehicle (EV) and Plug-in Hybrid Electric Vehicle (PHEV) Salary Sacrifice Scheme.
1.2 This policy aligns with NHS Fife’s commitment to achieving net-zero carbon emissions and contributing to sustainability goals as outlined in the NHS Scotland Climate Emergency and Sustainability Strategy.
1.3 The scheme supports NHS Fife’s objectives of improving staff recruitment, satisfaction, retention and affordability of sustainable transport options by facilitating access to ULEV (Ultra-Low Emission Vehicle) cars under a salary sacrifice arrangement.
2. LOCATION
2.1.1 This policy applies to all substantive employees of NHS Fife who meet the scheme’s eligibility criteria and whose employment is governed by NHS Fife.
2.2 Scope
2.2.1 This policy applies to:
• Staff employed directly by NHS Fife on a permanent basis and excludes staff on any non permanent, or as and when required contractual arrangements.
• Employees who meet the minimum eligibility criteria (e.g., minimum working hours, salary thresholds and length of service).
• Eligible staff using vehicles under this scheme for both personal and business purposes as defined by HMRC.
o Employees can refer to HMRC's guidance on Expenses and benefits: company cars and fuel for information on using company vehicles for both personal and business purposes.
o Government Expenses and Benefits Company Cars
o This resource outlines the tax implications and reporting obligations associated with company cars.
o Additionally, HMRC's Claim tax relief for your job expenses: Vehicles you use for work page offers insights into claiming tax relief on expenses related to business travel in company vehicles.
o Government Tax Relief for Employees/Vehicles you use for Work
o This includes guidelines on what qualifies as business travel and how to calculate allowable expenses.
3. RESPONSIBILITY
3.1 Chief Executive
3.1.1 The Chief Executive holds overall accountability for ensuring this scheme is implemented in alignment with NHS Fife’s sustainability and workforce wellbeing goals. The responsibility has been delegated to the Director of Property and Asset Management.
3.2 Directors
3.2.1 Directors are responsible for promoting the scheme within their areas of responsibility and ensuring compliance with this policy.
3.2.2 The Director of Property & Asset Management serves as the Executive Lead for the scheme, overseeing governance, compliance, and reporting.
3.3 Line Managers
3.3.1 Line managers are responsible for:
• Providing staff with information about the scheme.
• Supporting the onboarding of eligible employees.
3.4 Employees
3.4.1 Employees participating in the scheme are responsible for:
• Ensuring compliance with the terms of the salary sacrifice agreement.
• Using vehicles in accordance with NHS policies and HMRC regulations.
• Complying with rules around payment of parking fines and charges etc.
• Ensuring they understand the financial implications including the reduction in any pension contributions and responsibility for P11D Benefits in Kind.
• Advising NHS Fife and the Scheme Administrators of any issues which may affect their eligibility for this scheme.
3.4.2 Participating in a salary sacrifice arrangement, such as a car lease scheme, can impact your NHS pension benefits, and the effect varies depending on which section of the NHS Scotland Superannuation Scheme you are a member of.
• Childcare Vouchers and Cycle to Work Scheme: Salary sacrifice arrangements for these specific benefits are considered pensionable under the NHS Pension Scheme (Scotland). This means pension contributions and benefits remain based on the full, unreduced salary.
• Other Salary Sacrifice Schemes: For arrangements like car lease schemes, the sacrificed portion of salary is not pensionable. This means both pension contributions and accrued benefits will be based on the reduced salary during the salary sacrifice period.
For official guidance on pensionable salary and salary sacrifice schemes, refer to NHS Scotland's Pension Circular 2023/13:
NHS Scotland Pensions - Salary Sacrifice Circular
Scheme-Specific Implications:
• 1995/2008 Sections (Final Salary Schemes)
o Pension is calculated based on final pensionable pay (typically the best of the last three years).
o Salary sacrifice reduces pensionable pay during participation, which could lower pension benefits if close to retirement.
o Exiting the scheme well before retirement may mitigate long-term impact.
• 2015 Scheme (Career Average Revalued Earnings - CARE)
o Pension is built up year by year based on pensionable earnings.
o A reduced salary due to salary sacrifice directly lowers the pension benefits accrued that year.
3.5 Supplier Responsibilities
3.5.1 The scheme’s supplier, Tusker, is responsible for administering the scheme, including vehicle procurement, maintenance, tax and insurance provisions. NHS Fife reserves the right to audit the supplier’s compliance with contractual obligations. All administrative work will be managed under the CPC Drive Framework, (see section 4.4 below)
4. OPERATIONAL SYSTEM
4.1 Employees must meet the following eligibility requirements to participate in the scheme:
• Minimum Age: Must be at least 21 years old (subject to insurance provider requirements).
• Driving License: Must hold a full UK or EU driving license.
• Driving Convictions & Insurance History: Employees with unspent motoring convictions within the last three years and also any motor insurance claims within the last three years where full recovery was not made from the other party will be subject to review by the scheme insurers to determine eligibility.
• Earn above the National Living Wage after deductions and above the lower earnings limit for NI contributions, after the cost of the car is deducted.
• Have a minimum term of employment of 12 months (this can be reviewed in exceptional circumstances and with Executive Director approval).
• Be employed on a permanent contract.
• A driver must not have a non-motoring conviction that is not spent under the Rehabilitation of Offenders Act.
4.1.2 Employees are permitted to lease one vehicle under this scheme at any one time. Non-driving employees may designate a household member as the vehicle user, provided they share the same residential address.
4.1.3 Each employee after choosing a car, will be required to be vetted by the scheme managed service provider, Workforce and the Financial Services team to confirm eligibility as per policy.
4.2 Financial Parameters
4.2.1 The scheme includes a 50% pass-back of National Insurance Contributions (NIC) savings to employees, ensuring affordability of vehicles while advancing uptake of ULEVs.
4.2.2 Vehicles eligible for the scheme must:
• Be classified as ULEV with CO2 emissions below 75g/km.
• Be available for lease terms ranging from 24 to 60 months.
4.2.3 Mileage rates for business use will align with HMRC guidelines. These rates are lower than the NHS Fife business travel rates as these rates include a sum for wear and tear of the user’s car and will not be applicable for a lease car.
4.3 Benefits for Employees
Employees participating in the scheme will receive the following benefits:
• Full Maintenance Package: Covers servicing, routine maintenance, and replacement tyres (including punctures).
• Roadside Assistance: 24/7 breakdown cover across the UK and Europe.
• Fully Comprehensive Insurance: Includes Total Loss Protection.
• Lifestyle Protection: Coverage for early termination in cases of:
o Resignation, redundancy, retirement, transfer of employment in line with the TUPE regulations.
o Medical-related loss of license, terminal illness, death in service, or long-term sickness.
o Maternity, paternity, and adoption leave support (up to £500/month for a maximum of £6,000).
• Accident Management Support: 24/7 service for handling accidents, insurance claims, and vehicle recovery.
4.3.1 Lifestyle Protection Benefits
Employees participating in the EV Salary Sacrifice Scheme will receive additional lifestyle protection benefits, including:
• Early Termination Support: Coverage for early termination in cases of resignation, redundancy, retirement, relocation, TUPE transfer, medical-related loss of license, terminal illness, death in service, or long-term sickness. No early termination charge for resignation, redundancy, retirement, relocation, or TUPE after a 3-month exclusion period.
• Maternity, Paternity, Shared Parental, and Adoption Leave: Financial support during periods of maternity, paternity, adoption, and shared parental leave. Monthly rental credited to the employer for a maximum of 12 months if salary sacrifice reductions cannot continue due to statutory pay levels.
• Long-Term Sickness: Financial protection for the employer if an employee goes on long-term sick leave. Monthly rental credited to the employer for a maximum of 6 months if salary sacrifice reductions cannot continue due to statutory pay levels.
• Accident Management Support: 24/7 service for handling accidents, insurance claims, and vehicle recovery.
• Comprehensive Insurance: Fully comprehensive insurance including Total Loss Protection.
• Maintenance and Roadside Assistance: Full maintenance package covering servicing, routine maintenance, and replacement tyres (including punctures). 24/7 roadside assistance across the UK and Europe.
For full details please refer to the full lifestyle protection document.
4.4 Contractual and Operational Details
4.4.1 The scheme is administered in collaboration with Tusker, with contractual documents such as the Salary Sacrifice Agreement, Master Contract Hire Agreement, and Insurance Policy Summary governing operations.
4.4.2 Employees must comply with all terms set out in the contractual documents, which form an integral part of this policy.
4.5 Managed Service by CPC Drive
4.5.1 CPC Drive will provide a fully managed service, which includes:
• Scheme Setup & Administration: Managing scheme setup, eligibility criteria, and contractual agreements.
• Financial and Payroll Support: Ensuring compliance with NI savings treatment, providing payroll reduction reports, and offering financial guidance.
• Employee Engagement and Support: Managing the driver portal, providing marketing materials, and offering employee insurance and RAC cover.
• Operational and Contractual Management: Handling insurance policy reviews, DocuSign processes, and consolidated invoicing.
• Ongoing Compliance & Governance: Monitoring VAT treatment, CO2 limits, and IFRS16 compliance while supporting sustainability reporting.
In addition to scheme administration, CPC Drive will provide the following services:
• Driver Portal: Employees will have 24/7 access to live vehicle tracking, policy information, and service requests.
• License and Insurance Verification: Annual license checks for all employees participating in the scheme.
• Payroll & HMRC Reporting: Monthly reports to NHS Fife, including Benefit-in-Kind (BiK) details, payroll deductions, and P11D tax reporting.
• Vehicle Order and Delivery Management: CPC Drive will handle new vehicle orders and arrange delivery.
• End-of-Contract Support: Managing vehicle return processes, excess mileage assessments, and damage charges.
4.5.2 CPC Drive will work closely with NHS Fife to ensure the scheme is effectively managed and aligns with NHS sustainability and workforce objectives.
4.6 Governance
4.6.1 NHS Fife will monitor the scheme’s uptake, financial performance, and alignment with sustainability targets through regular reports to the Sustainability and People and Change Committees and Local Area Partnership Forums.
4.6.2 Reviews will include:
• Staff feedback and satisfaction surveys alongside any relevant information from exit interviews.
• Metrics on carbon emissions reductions achieved through the scheme.
5. RISK MANAGEMENT
5.1 NHS Fife will assess risks associated with the scheme, including financial liabilities, reputational risks, and compliance with tax and employment regulations.
5.2 Any risks identified will be documented in the Corporate Risk Register and monitored through the relevant governance structures.
6. RELATED DOCUMENTS
6.1 Supplier’s Salary Sacrifice Agreement and Contractual Terms (available on request).
6.2 NHS Scotland Climate Emergency and Sustainability Strategy.
6.3 CPC Lifestyle Protection Document
7. REFERENCES
7.1 HMRC Guidelines for Salary Sacrifice Schemes.
7.2 The Equality Act 2010 (where applicable).
7.3 National Minimum Wage Act 1998.
7.4 Transfer of Undertakings (Protection of Employment) Regulations 2006 and its amendments in 2014, commonly known as TUPE.
