Take advantage of huge savings on brand new electric vehicles for you and your employees.
What is an electric car salary sacrifice scheme?
There’s been a significant movement towards more environmentally friendly vehicles in recent years. The electric car sacrifice scheme is becoming very popular as a method people can save money on buying an electric car.
The scheme allows employees to make a monthly contribution towards the purchase of a car. The contribution is deducted from the gross salary which means employees can save on the income tax and NIC.
How does the scheme work?
The car is leased to you from a third party supplier that has partnered with your employer. The cost of the car is deducted monthly from your pre-taxed salary, therefore reducing the amount of tax and NIC on the salary.
It is important to clarify that the car salary sacrifice is still eligible for a company car tax, known as Benefit-in-Kind which the employee needs to pay tax and NIC. However, this tax and NIC on BiK is often much less than the savings you will make in income tax and NI – especially if you choose an electric car.
Is a salary sacrifice worth it?
There are a number of advantages in the scheme
- Have a brand new car which doesn’t require any upfront payment
- Income tax and NIC savings
- Saving on fuel cost
- Low BiK rate comparing to petrol or diesel cars
- In a great position ahead of the 2030 diesel and petrol ban
- Enhance the benefits package to employees which help to attract and retain staff
- Saving on Class 1A NIC
- Reduce business mileage reimbursement cost
- Support for corporate social responsibility goals by reducing carbon footprint
If you need further advice, please contact us.