Originally posted on www.telegraph.co.uk
A new green tax inspired Tusker chief David Hosking to re-focus his business, and now he is reaping the rewards
Back in the early 2000s, the business was on its last legs and was just months away from liquidation. A decade later its turnover was £14mn which went on to more than tripled over the next three years. It is now on target to reach close to £100m by the end of 2014. Tusker, a salary sacrifice scheme provider, counts the Airbus, the NHS, National Grid and Gucci among its clients.
With its number of employees growing threefold in as many years and the site recently doubling in size, the business is expanding at a rapid pace. Born out of the .com boom, Tusker was founded in 2000 with the intention of bringing the world of contract hire cars and leasing company cars to online. But by 2003, the business was running at loss of £2m and was “three months away from closing its doors”, according to its current CEO, David Hosking.
“My original brief, along with the then MD, was to see whether the business was worth saving,” he said. “I was given three months to convince the venture capitalists.”
Six months later, another £1m was poured into the business, and by 2006 it broke even. Tusker grew at around 15pc year on year until the recession took hold in 2008.
“That was really when we decided to change the focus of the business,” said Mr Hosking, 44, from Hampshire.
“We saw an opportunity in the market – the salary sacrifice car scheme.”
In April 2008, the then Chancellor of the Exchequer Alistair Darling introduced new low benefit in kind tax rates for company cars with a CO2 emission of below 120g per kilometre.
Mr Hosking said: “Basically what that meant was that you could get a company car, if you chose a super low emitting vehicle, and only pay benefit in kind tax on that car of 10pc. So clearly, you can make a significant saving.”
“I am not saying we invented salary sacrifice car schemes,” he admits. “But we made a simple, clever and admin-friendly for companies to access them. And we were there first.”
Launching on October 1, 2008, Tusker emerged as the principle provider of salary sacrifice car schemes for the UK.
“We don’t actually ever see the cars,” Mr Hosking explained. “We convince our customer that they need to give their employees access to the scheme.
“We are responsible for raising awareness among employees about the scheme. We order the car and deliver it.
“Then we take care of the maintenance, servicing, insurance and so on. At the end of the three years, we collect the car and take it straight off to an auction to sell.”
The Watford-based business was given a major boost in 2010 when it secured a three year partnership with NHS North of England Commercial Procurement Collaborative (NOE CPC), which was renewed in 2013 for another four years, and accounts for 25pc of Tusker’s business. In 2010, the turnover was £14m, which grew to £26m in 2011, £46m in 2012 and £61m in 2013. According to Mr Hosking, Tusker is on track to meet its target of close to £100m by the end of the year. Tusker’s latest project is to encourage more of their customers to sign up to electric cars.
“I would love to say it is for ethical reasons – but it is more for commercial viability,” said Mr Hosking, who previously worked in sales at Yellow Pages.
“The benefits in terms of savings are quite substantial. People are choosing electric cars where they see the benefit.”
Tusker’s other campaign is more political: lobbying the government to change the School Teachers’ Pay and Condition Document.
Under the current review, teachers’ salary sacrifices can only be made in exchange for child care vouchers, cycle schemes and mobile phone schemes.
“Teachers are the only profession that are excluded from salary sacrifice car schemes,” Mr Hosking said.
“We have 30 local authority customers, and the first thing they have to do is exclude teachers from the scheme. We are trying to get that changed.”
Mr Hosking has thrown his full weight behind the campaign. He has met with a dozen MPs and a couple of ministers, and has launched a petition for state school teachers to sign in favour of car schemes being included in salary sacrifice options. Despite the company’s massive growth over the past few years, Mr Hosking has no plans to expand beyond the shores of Britain. Global strategy consultants OC&C have predicted that over the next decade, 200,000 new cars will be bought each year on salary sacrifice schemes, accounting for 10pc of the UK new car sales.
“We are definitely going to concentrate on the UK market,” he said. “We want to make sure we are at the forefront of it – we are at the moment and we intend to stay.”