Popularity of owning an electric vehicle (EV) is rising – partly due to the Government ban
on sales of new petrol and diesel cars in the UK by 2030.
The EV salary sacrifice scheme is a government initiative designed to help employees purchase electric cars. This scheme allows employees to make a pre-tax payment for a car, meaning that they’ll save money on taxes and National Insurance contributions. The scheme is available to any employee who is eligible to receive a salary sacrifice arrangement, regardless of their employer.
How does an EV salary sacrifice scheme work?
The scheme works by allowing employees to make a pre-tax payment for their EV. This payment is deducted from their salary before tax and National Insurance contributions are calculated. This means that the employee will save money on taxes and National Insurance contributions, as these are based on their gross salary. The employee will then receive the
car as part of their salary and will pay for it in monthly instalments.
It’s designed to encourage and incentivise employees to make more environmentally friendly choices and purchase electric cars because they have lower running costs than petrol or diesel cars – and they’re more environmentally friendly. The scheme can also help to reduce the financial burden of buying a car for employees.
Who is eligible for an EV salary sacrifice scheme?
The EV salary sacrifice scheme is open to all UK residents who are aged 16 and over, provided they meet certain criteria – like having a driving licence, being employed, and earning a minimum salary. It’s administered by a third party, who’ll assess the employee’s eligibility and provide them with a quote for the car. When the employee agrees to the quote, they’ll then be directed to a participating electric car retailer. The retailer will then provide the employee with a car, which will be paid for in monthly instalments.
What are the benefits of the electric vehicle salary sacrifice scheme for employers?
Salary sacrifice schemes are HMRC and VAT compliant. Employers will also attract better employee engagement and retention, while reducing the company’s carbon footprint, making them a desirable company to work for.
Some more benefits of the EV salary sacrifice scheme for employers include:
- Fully insured and maintained company cars with all in-life services
- Employee EV leasing process and interaction is managed by the leasing company
- Salary sacrifice schemes complement other existing employee benefits
- NI contribution savings
- Reduced fuel costs and no upfront costs
An EV salary sacrifice scheme can also work alongside any existing fleet schemes you have in place – including the Workplace Charging Scheme.
Mr Charger has partnered with SalSac – the Car Salary Sacrifice Experts
SalSac Ltd. is the UK’s leading Salary Sacrifice Lease Car Provider. SalSac is a vehicle-based software company providing salary sacrifice accounts calculations for the car leasing industry, employers, and employees.
SalSac’s mission is to provide a cost-neutral service to businesses that would like to other Salary Sacrifice Lease Cars to their employees in order to help employees save money on their leases, and to assist businesses in achieving their Green
According to SalSac, a car salary sacrifice can save you upwards of 40% when compared to leasing a car personally with the highest savings attributed to fully electric cars.
To enhance your electric car salary sacrifice, SalSac is othering a fully fitted electric car home charger fitted by us at Mr Charger with every SalSac. The payment of your EV charger is spread over the entire lease term – either 24 or 36 months- and you save more on tax and national insurance.