A survey involving 2,000 working adults revealed that 79% believe it's crucial for their employer to actively pursue sustainability. With nearly half of employees (48%) are interested in accessing an electric vehicle (EV) through a salary sacrifice scheme, and a third (33%) consider it the most appealing 'eco-friendly workplace benefit'.
Yet, only a third of employers (32%) offer schemes, indicating that businesses may be falling behind.
The research by VWFS Fleet uncovered that 75% of workers aim to reduce the emissions from their commute, with two-thirds (67%) acknowledging that salary sacrifice schemes make EVs more affordable.
If your company has not yet introduced an EV salary sacrifice scheme, you are missing out on the advantages available to both your business and your employees.
What is EV Salary Sacrifice?
The Salary Sacrifice scheme for Electric Vehicles (EVs) is similar to the cycle-to-work shceme, but it's designed specifically for electric vehicles, allowing employees to save as much as 40% on the cost of an EV.
Employees sacrifice a portion of their gross salary, towards a brand new EV, which is fully insured and maintained for the next two, three or four years.
Due to the favourable Benefit-in-Kind rates for electric company cars, a salary sacrifice scheme is the most cost-effective way to drive a brand-new electric car. Although the benefits don't stop at low company car tax, there are a plethora of benefits for both the employee and the employer.
Employers
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 |
40% Tax Payer |
|
| 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.
Employees
By sacrificing a portion of their gross salary, employees can save up to 40% on the cost of an electric vehicle (EV). With Lease Electric, our all inclusive package not only enable your employees to drive a brand-new EV but also include fully comprehensive insurance, maintenance, tires, road tax, MOT, and breakdown cover. As the payment for the EV is deducted from the employee's gross salary, credit checks are not required.
Employee Saving Example
|
|
20% Tax Payer |
40% Tax Payer |
| Monthly Costs | £529.94 | £832.51 |
| Income Tax Saving | -£105.99 | -£333.00 |
| National Insurance Saving | -£52.99 | -£16.65 |
| Company Car Tax | £10.65 | £30.69 |
| Net Monthly Salary Reduction | £381.61 | £513.55 |
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.
To launch your EV Salary Sacrifice Scheme with Lease Electric, visit the links below: