How Can I Drive an Electric Car Through a Salary Sacrifice Scheme?

An electric car salary sacrifice can be a cost-effective way to drive an EV. If your employer offers a salary sacrifice scheme, here is everything you need to know, and how to go about opting for one.

 

What is a Salary Sacrifice Scheme? 

A salary sacrifice scheme is where an employee of a business gives up an amount from their gross salary in return for a non-cash item. Popular salary sacrifice schemes include childcare, pensions, or a car.

 

By contributing to a salary sacrifice scheme, the employee saves on income tax and national insurance contributions, deducting the cost from their salary before tax is deducted.

 

How to Access a Salary Sacrifice Scheme

It is important to note that not all companies offer salary sacrifice schemes and the ones that do differ from workplace to workplace.

 

Your employer may send out emails or newsletters or have a specific portal on your employee hub. If you’re interested in leasing an electric car through a salary sacrifice scheme, the best thing to do is to speak to your manager and see what they can do for you.

 

There are plenty of companies that offer these schemes, such as Tuskers, The Electric Car Scheme, and Fleet Alliance.

 

If you are a business looking to get involved, you can find a fantastic list of the best Salary Sacrifice EV loaners on Zapmap’s website.

 

What are the Benefits of a Salary Sacrifice Scheme?

 

For the Employer

Good Staff Perk

An electric car sacrifice scheme can be very attractive to potential employees.

 

Offering an electric car lease will prove that the company is not only looking out for its staff, but that it is also environmentally friendly and eco-conscious.

 

Shows Your Business is Eco-friendly

In today’s climate, businesses should be doing as much as they can to help combat climate change.

 

Offering electric cars is a very positive contribution, especially if your employees regularly commute to the office or to meetings.

 

Save on National Insurance Contributions

Although mostly beneficial to the employee, the employer also saves through the change from a Class 1 NIC to a Class 1A NIC, saving money for both parties.

 

Easy to Implement

Salary sacrifice schemes aren’t a new feature – they’re easy to set up and implement, which makes them a low-effort, high-reward scheme for everyone involved.

 

Risk Protection for Peace of Mind

Many companies include risk protection in their lease deals in the event your staff members go sick, leave the business, or get made redundant, meaning the employer is protected.

 

For the Employee

Cost-effective Way of Driving an EV

Electric cars are expensive. For some, a salary sacrifice scheme may be the only way they can afford to have a brand-new electric vehicle.

 

Significant Savings

With the scheme, it is possible to save money in several different areas. The fee taken from the employee’s salary includes the MOT, servicing, and essential maintenance costs. This can provide significant savings.

 

Lower Fuel and Running Costs

Since electric cars don’t use petrol or diesel and instead run on electricity, they are much cheaper to run.

 

Many companies that offer these electric car salary sacrifice schemes will offer free chargers at the workplace so the employee will have to pay very little to keep the car running.

 

Insurance, Servicing, Road Tax & Breakdown Assistance Included

Some of the most expensive parts of running a car come outside of the car itself.

 

Since car insurance, servicing, road tax and breakdown cover is included with the fee paid each month, employees don’t have to worry about these costs.

 

How to Sign Up for a Salary Sacrifice Scheme

If you think a salary sacrifice scheme might be for you, then speak to your employer to find out if they offer electric vehicles.

 

Every company is different and may offer different cars and deals – your manager or HR department will be able to point you in the right direction.

 

Is a Salary Sacrifice Scheme Worth It?

For employers, offering a salary sacrifice scheme can be a brilliant way to show your employees you care. It can help with worker retention rates and reduce your national insurance contributions.

 

For employees, a salary sacrifice can help you drive an EV in a cost-effective manner. You can save on PAYE and NI contributions, although you will have less to take home in your paycheck every month, as it is taken before you get paid.

 

However, you would probably be spending this money on a car if you were leasing from elsewhere.

 

FAQs

 

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