How EV Salary Sacrifice can support your employees

Previously, the Access Group revealed that 75% of employees stated they are more likely to remain with their employer due to their benefits program.

While many are aware of common employee benefits like pension plans, flexible working arrangements, holiday trading, medical insurance, and the cycle to work scheme, only about a third of employers offer car schemes, including EV Salary Sacrifice.

International recruiter Robert Walters has recently published research indicating that two-thirds (66%) of professionals consider commuting expenses a higher priority than technology equipment, food, and health/wellness benefits.

While many respondents likely referred to the cost of train travel, with 68% of people in the UK commute to work by car or van, the cost of fuel, rising insurance costs, and upcoming changes to road tax are also impacting employees.

How can the Lease Electric EV Salary Sacrifice Scheme support your employees?

The Salary Sacrifice scheme for Electric Vehicles (EVs) is similar to the cycle-to-work scheme, but it's designed specifically for electric vehicles. By sacrificing a portion of their gross salary employees to save as much as 40% on the cost of an EV, the most cost-effective way to drive a brand-new electric car.

Our Salary Sacrifice Scheme, enables employees to drive a new, insured lease vehicle, at a fixed monthly cost for the contract term, which includes the following for the life of the contract:

Accident Management in the event of a claim
All routine servicing and maintenance costs*
Breakdown assistance that includes a replacement vehicle for the first 48 hours
Cover for business or personal use
Glass damage protection for the repair of all body glass
Motor Insurance Database (MID) updates, ensuring legal compliance
Own damage protection covering the cost of repairs in the event of accident, fire or theft
Road tax for your vehicle for the term of your contract (at the prevailing rate).
The cost of unlimited tyre replacements and repair *
Third party liability

* The maintenance scheme does not cover driver abuse, damage or replacement as a result of neglect. These charges will be billed via a vehicle services invoice.We have a Fair Play policy on tyres. This means that damaged tyres will be replaced inside the maintenance budget. Replacements in the event of abuse, neglect, theft or vandalism will be recharged.

Employee Saving Example

OMODA 5 ELECTRIC ESTATE 150KW Noble 61kWh 5dr Auto

	20% Tax Payer	40% Tax Payer
Gross Salary Sacrifice	£469.24	£469.24
Income tax saving	-£93.85	-£187.70
National Insurance saving	-£37.54	-£9.38
Company Car Tax (2024)	£11.50	£23
Net Monthly Salary Reduction*	£349.35	£295.16

*Omoda 5 Electric Estate (2024) 150kW Novle 61kWh 5dr Auto | Pricing is based on a 4-year Funder-Maintained Business Contract Hire agreement, covering 10,000 miles per annum. An excess mileage charge will apply if contracted mileage is exceeded. Offers may be subject to stock and availability. This offer is only available through Arval UK Limited. Other terms, profiles and mileages may be available, please get in touch for more information. The quote shown is an estimated net cost. The cost of salary sacrifice depends upon your own personal tax position. Tax and NI rates may be subject to change at any time. Figures based on a 40-year-old with a GL3 postcode. This is a Salary Sacrifice offer only. You will not own the vehicle. Saving calculation based on Class 1 National Insurance reduction from lower employee salary and increase in Class 1A National Insurance due to taxable benefit.(05.03.2025)

Cost of Charging

Despite the Energy Price Cap increasing from the 1st April 2025, In many cases, EVs continue to benefit from significant savings on the cost of fuel. Charging a medium-sized electric car at home can cost less than half the price of filling up an equivalent petrol or diesel vehicle.

Many Electricity provides have EV friendly tariffs. At the time of writing (March 2025), those utilising the Exclusive Pod Point charger customer tariff, benefit from overnight electricity rates at 9p per Kilowatt-hour (kWh).

Cost Comparison

BMW I4 and BMW 4 Series Gran Coupé.

Last year, the BMW I4 became a favourite among our Salary Sacrifice customers, earning a spot in our Customers' Top 10 EVs of 2024. This model offers an electric take on the popular BMW 4 Series Gran Coupé.

BMW i4 Gran Coupé
250kW eDrive40 Sport 83.9kWh 5dr Auto

367 miles (WLTP Combined)

BMW M440i xDrive Gran Coupé

33.2 mpg (WLTP Combined)

59l fuel tank capacity

Home Charger Tariff - EDF Energy Go Electric with Pod Point =2p per mile.

0-100% charge = £7.34

Unleaded = 19.10 per mile.

£82 for a full tank of fuel (approx 430 miles)

Standard UK Electricity Rate = 8.4p per mile

0-100% charge = £29.36

Public Charging Ultra Rapid Charger = 17p per mile

0-100% charge = £65.13

Motorway Unleaded= 22.25p per mile

£95 for a full tank of fuel (approx 430 miles)

The figures have been sourced from RAC Fuel Watch (accessed 25.02.2025) and RAC Charge Watch (accessed 25.02.2025). To find out more about our EV charging partner Pod Point, and the Home Charging Tarriff with EDF Energy, click here.

Workplace Charging

To support employees without access to home charging, consider installing EV chargers at the workplace. Some businesses charge employees an agreed monthly fee to use the onsite charging, others charge per use or by the kilowatt and some provide free onsite charging to their employees.

There are currently grants available that can reduce the cost of this installation for your business:

Workplace Charging Grants

What about the rise in Benefit-in-Kind tax?

Salary Sacrificed Electric Vehicles (EVs) are considered company cars for tax purposes, making the Benefit-in-Kind (BiK) Tax a key factor. Starting April 2025, fully electric vehicles will see a 1% annual increase in BiK rates until 2028, then a 2% increase annually, reaching 9% by 2029-2030. Despite these increases, salary sacrifice remains the most cost-effective option for driving an electric car.

Discover how these rates will affect you or your employees by clicking here.

For a detailed breakdown of BiK rates by year, please consult our BiK rate table.

How can the Lease Electric EV Salary Sacrifice Scheme support my business?

A 2024 survey conducted by VWFS Fleet, which included 2,000 working adults, found that nearly half of the employees (48%) expressed interest in obtaining an electric vehicle (EV) through a salary sacrifice scheme.

Implementing an EV Salary Sacrifice Scheme can enhance your company's sustainability initiatives, aid in recruitment and retention, reduce National Insurance and Corporation Tax, and lower the risk associated with grey fleets. This scheme is cost-free to implement, poses low risk, and is an employee benefit that is simple to manage.

Employer Saving Example

Employers can save several thousand pounds on every employee vehicle leased through a salary sacrifice scheme. Additional savings from Corporation Tax Relief also available.

	20% Tax Payer Ora 03	40% Tax Payer Tesla Model Y RWD
Monthly Net National Insurance Contributions	- £73.13	-£114.89
Net National Insurance Contributions over 4 years	-£3,510.24	-£5,514.72

Figures based on 4 year contract, 8,000 miles per annum including all maintenance, servicing, tyres, breakdown and fully comprehensive insurance. Company car tax based on delivery from April 2023. Saving calculation based on Class 1 National Insurance reduction from lower employee salary and increase in Class 1A National Insurance due to taxable benefit.

What about the rise in National Insurance?

One of the key announcements in the Autumn Budget is that the rate of Employer National Insurance Contributions (NICs) will rise by 1.2 percentage points, bringing it to 15%.

Our EV Salary Sacrifice Scheme could lower your National Insurance Contributions.