Salary Sacrifice for Electric Cars
Main Benefits of Salary Sacrifice
eco will explain all benefits in detail to your employees
Help save the planet
Moving to electric vehicles is the quickest thing an individual or company can do to help save the planet. Cutting emissions by 23%.
Massive Tax Savings
Save £14,000* compared to a private lease using the governments generous 28%-42% salary sacrifice tax breaks.
Release Tied Up Cash
Release on average £10,000 cash tied up in your privately owned/leased personal car by switching to a "green fleet" EV provided by your employer.
What is Salary Sacrifice?
Salary Sacrifice is a government approved employee benefit to support the drive for new cars to be 100% electric by 2030 and offers massive tax saving. You can only access Salary Sacrifice savings if your employer runs a scheme, however they are quick to set up and eco will guide your business through the process and help it select the best EV leasing partner for its needs.
Available to All employees
Salary Sacrifice is an employee benefits scheme that allows your business to provide its employees with a new EV as a” Green Perk”, even if they don’t drive for work purposes.
Massive Tax Savings worth £14,000
Paying for an EV lease directly from gross salary saves the employee 28-42% in Tax & NI payments making EVs cheaper than the equivalent petrol cars. That’s a massive £14,000 of tax savings on a 4-year lease*
£10,000 capital Release
On average £10k can be released in cash or reduced personal credit by selling the old petrol car on your drive and letting your business provide the EV secured against their assets.
50% lower running costs
EVs are 55% cheaper to run per mile compared to petrol cars and 40% cheaper to maintain due to less breakable parts, with most manufactures guarantying batteries for 100,000 miles or 8 years. However, batteries are expected to last for 200,000 miles and will have “second-lives” are your car has long gone.
Business also Saves money
Salary Sacrifice schemes are popular with employers who also save 23.8% from not paying 12% NI and by reclaiming 50% of the VAT paid. Make sure they know!
Early Leaver Insurance
A business can often remove the risk of empty EVs created by staff leaving before the end of a lease, via a simple assurance policy. There is no cost to the employer for this cover
How the Salary Sacrifice Scheme Works
The scheme reduces Tax and NI via the employee salary. The cost of a new EV Lease is taken by the employer from the gross salary therefore Tax and NI is paid on your salary minus the EV lease cost.
As the Tax and NI is taken from the gross income, which is now lower due to the deduction of your lease cost, your tax will reflect a lower salary rate.
This will make a huge difference to your take home pay. The take home pay increase will cover the Lease cost by around 50% depending on your salary level.
How does it benefit your employees?
Save Money
New Electric Vehicle of their choice Enables employee to benefit from £10k*cash release by selling the previous car Company EVs save 28%-42% over private leases EVs have a 66% lower running cost
Sustainability Goals
Save 4.6 tons of CO2 emissions per car(based on 11,500 average miles driven) Do your bit to save the planet
Everything Covered
Lease inclusive of maintenance, servicing, and tyres Roadside assistance Driver insurance including members of the family Early termination insurance to cover for long term sickness, maternity, resignation, and redundancy. Overall, this means that for every £1,000 spent on leasing, the employee saves £300-£420, depending on their tax bracket
Benefits to employers
12% National Insurance saving. 10% VAT saving, with businesses able to claim back 50% of the VAT on the lease. Overall, this means that for every £1,000 spent on leasing, your business saves £250 in tax rebates
Talent Retention
Biggest and most tax-efficient employee perk available. 75% of employees stay due to employee benefit packages. EV SSS makes it easier to recruit and retain staff
Corporate Responsibility
All leased vehicles will count towards your green quotas, such as ISO14001 Corporate Responsibility targets, which look at energy efficiency and the amount of green energy that your business consumes. By utilising the Salary Sacrifice Scheme, you’re able to make huge strides of progress towards these protocols without having to make massive changes - you just need to offer your employees the chance to drive new, reliable, non-polluting cars at an incredibly affordable price!
Further benefits
In addition to the above, there are also many financial benefits to your business, particularly if you’re able to sign multiple employees up to the scheme, as you’ll receive a higher level of VAT claim back and will be able to aim for more aggressive eco-friendly targets as a result. Furthermore, eco is looking to ensure that businesses engaging with salary sacrifice for car lease schemes are protected in the event that an employee leaves the company.
Getting involved with the salary sacrifice scheme
Now that you have all the information that you need to make a decision on whether to engage in the salary sacrifice scheme, you’re probably wondering what the next steps are. In general, there are two different things that can happen at this point: As an employer, you begin to gauge whether the scheme is something that your employees would be interested in and whether salary sacrifice for electric cars is something that your employees could feasibly manage. If gathering this information is something you need assistance with, you can get in touch with the eco team, who will be able to conduct the survey on your behalf, collating all of the relevant information that is required. Some businesses struggle to implement such a scheme and do still distance themselves due to the fear of change. If this is the case, we can assist you in laying out all the information in a way that’s clear and easy to process for your managers and directors - following this, they will then be able to make an informed decision regarding salary sacrifice leasing for the business
Other assistance
For more assistance on the salary sacrifice car lease scheme or to discuss action plans for implementation at your business, please feel free to contact the eco team. Our experts are on hand to assist you with your questions and queries each day by phone, email, and our online contact form! Just pick the method of contact that you prefer and we’ll get back to you in no time at all
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