A salary sacrifice car scheme offers employees a number of benefits. Typically, all maintenance, road tax, business insurance and breakdown cover costs are included within the monthly cost, which is deducted from the employee’s gross salary. This creates savings in income tax and National Insurance Contributions which can be significant.
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E.ON’s company car provision went all electric in 2019, and the salary sacrifice scheme now enables non-company car drivers to access an EV too. E.ON and Lex Autolease worked together on developing this new employee proposition, which is the first EV-only salary sacrifice scheme provided by Lex Autolease.
Leasing company claims that salary sacrifice plays a crucial role in helping motorists adopt electric vehicles ahead of the ban on petrol and vehicles models in 2030. Employees can drive a new vehicle, for a low fixed monthly cost, with the bonus of a tax and National Insurance (NI) savings.
The single biggest reason behind the rise of the EV-centred salary sacrifice scheme in the last couple of years has been the introduction of zero and very low rate benefit-in-kind taxation rates, meaning that the latest, most advanced and environmentally-friendly cars can be offered to employees at extremely attractive monthly rates.
Octopus has designed its scheme to be low effort and zero cost for a business to set up. From launch, Octopus experts are available to help employees choose their cars and get set up with charge points and EV energy tariffs; as well as support the business with scheme documents, approvals and payroll.
Salary sacrifice allows all eligible employees to drive a new BEV at an attractive inclusive monthly cost compared to a petrol or diesel equivalent. And for companies, it is also a positive shift in terms of environmental impact and the broader benefits around duty of care for employees.
Electric Vehicle (EV) Salary sacrifice in particular is having a renaissance, following the government’s announcement that from April 2020-21 zero emission cars will pay 0% company car tax.