What is the UK’s Best Salary Sacrifice Electric Car Scheme 2024?

How To Pick The Best EV Salary Sacrifice Scheme For Your Company

As an employer, you want to offer employee benefits that provide value to your team on top of their annual salary.

But before starting your salary sacrifice electric car scheme, there are a few things to consider to help you find the best scheme for your business.

The best EV scheme will depend on a variety of factors, including:

• Employee budgets
• How much support is needed from the provider
• Specific business and employee needs
• The types of electric vehicles available.

What Do You Want To Achieve From An Electric Car Salary Sacrifice Scheme?

To pick the best EV scheme, you need to think about why you’re offering the benefit in the first place. Is it because you want to:

• Improve your company’s carbon footprint and reach its sustainability goals?
• Provide a valuable employee benefit?
• Increase employee engagement and retention?
• Stand out as a company?

Different schemes will offer different things, so make sure to research the providers to see what they offer. Knowing why you want to introduce a scheme can help you make a final decision.

Danielle Hines
Employee Benefits Consultant at Drewberry

What Is Your Budget?

Before you begin looking at the providers on the market, it’s good to have a rough idea of what your budget is. Although an electric car salary sacrifice scheme costs very little to set up, there are some costs to be aware of. These include:

• Early termination fees
• Lease payments if an employee is not working due to long-term sickness
• Car insurance and cancellation insurance (depending on the scheme).

But, terms and conditions vary from provider to provider, and so do potential costs. Some providers include cancellation protection. Others might waiver the early termination costs under certain circumstances. You will need to factor these into your budget.

Remember to keep your budget in mind while researching different providers. The best scheme for your business will depend on how much your company and employees can afford.

For example, staff earning an average wage may want an EV that doesn’t reduce their income too much. So, you’d pick a provider that offers a range of cars for different budgets.

What Do Your Employees Want?

This is a big factor in selecting the best scheme for your company. There’s no point choosing one based only on the business and its budget. As the employees are going to be the people utilising the scheme, their opinions and feedback are essential.

• What are their requirements?
• How much can they afford to spend?
• Is there a big range of EV models available?
• Will they need additional support?

The above questions will help you find the best salary sacrifice electric car scheme. Some providers will offer a dedicated account manager to set up and run the scheme, for example. This extra support may be useful as it reduces admin responsibilities and provides a contact for employees if they have issues.

Best Savings Through A Salary Sacrifice Electric Car Scheme

An electric car scheme offers many great savings for your company and your employees. Read more about the potential electric car savings you can make.

Best Savings For Employers

Reduced Business Fuel Expenses

One of the best savings a company can make through an electric car scheme is on fuel reimbursement costs. Often, business mileage is a large expense with traditional company cars. But, electric vehicles are cheaper to power than a petrol or diesel car. In fact, it’s 800% cheaper.

Electricity is more affordable than petrol or diesel. As HMRC has set the advisory rate at 5p per mile for company electric car reimbursement, your business can make large savings on employee mileage costs. It’s worth remembering that this rate is up to 45p per mile for petrol and diesel cars.

Reduced National Insurance Contributions (NIC) And VAT

Your employees pay less National Insurance (NI) as the salary sacrificed reduces taxable income. As they don’t pay NI on the amount sacrificed, your company doesn’t pay NI on it either. The more employees that sign up to the scheme, the higher your savings.

Here’s an example of how an employee’s taxable income is lowered through salary sacrifice. If an employee sacrifices £500 of their £2,000 monthly gross pay, their taxable income becomes £1,500 – this is then the amount that you pay NI on.

You also save money on VAT through a salary sacrifice car scheme. This tax is included within the employee’s monthly lease costs. As an employer, you can claim back 50% of this cost, making the scheme tax efficient.

No Set Up Costs

Starting an electric car salary sacrifice scheme for your employees costs nothing to set up. So, no matter how many staff members sign up to the scheme, there’s nothing for you to pay upfront. It’s a free employee benefit to introduce.

Best Savings For Employees

No Upfront Costs

An employee pays nothing upfront to get a brand new electric car in a salary sacrifice scheme. Unlike personal leases taken out on an individual basis, employees don’t have to pay any deposits or extra fees when signing the agreement.

This is very attractive to those wanting to drive an EV, as one of the biggest barriers to having one is the initial purchase cost.

Take this example:

Low Fuel Costs

Due to the low cost of electricity usage, charging an EV is cheaper than filling a car with petrol or diesel.

Below is an example of the cost differences between an EV and a petrol car. It’s based on travelling 20 miles per day having used electricity costs 28p/kWh and petrol costs of 188p a litre.

By driving an electric car instead of a petrol one, your employees can save around £832 a year on fuel.

All In One Package

Scheme providers offer all in one packages that include:

• The car
• Servicing
• Maintenance
• Insurance and road tax
• Breakdown cover.

You will find all of these included in the employee’s fixed monthly cost, which makes it cost effective in the long run. An all in one package is more affordable and convenient. Some scheme providers even offer extras, such as a free home charger and energy tariff offers.

Having a personal lease would mean they have to pay for servicing, maintenance, and insurance on top of their monthly lease payment. These expenses can cost over £3,000 a year on average.

All employees need to pay on top of their monthly lease cost is the Benefit in Kind tax. This is a tax payable by staff who receive extra benefits on top of their salary. The rate for this is set at a very low 2% though.

With an electric car salary sacrifice scheme, an employee can save between 30% to 60% compared to a personal lease.

Best Cars Available On A Salary Sacrifice Electric Car Scheme

As electric vehicles become popular, car manufacturers are developing more models. This means that there are more options on the market nowadays.

But these cars can be expensive, which is why a salary sacrifice car scheme is a great idea, allowing your employees to get an EV at an affordable price. As there’s many cars to pick from, all your employees can get an electric vehicle no matter their budget.

Here we’re going to look at some of the best cars available on a salary sacrifice electric car scheme.

Best Electric Cars For Range

A common concern for EV drivers is the range of the car (how many miles a full charge will last). The last thing you wants is to be unable to find a nearby charging station or get to your destination. So, if the range is your priority, here are some of the best models available.

These ranges are only a guideline. The actual range of electric cars depends on these factors:

• Driving conditions
• Personal driving style
• Outside temperature
• Heating and air conditioning.

Best Electric Cars For Affordability

EVs are quite expensive, but it’s possible to get one for an affordable price, as well as ways to keep the costs down, even more so in a salary sacrifice scheme. Employees can reduce their mileage allowance and increase the lease length to cut costs. Remember that the employee will make more savings in a scheme due to the all in one package. This makes the cars listed below cheaper in the long run.

Best Electric Cars For Luxury

The best part of an electric car salary sacrifice scheme is that employees can still get their hands on a luxury EV without paying a fortune.

Here are some of the best luxury electric cars available. These are based on someone earning above £50,000 and having 10,000 mileage allowance.

Best Ways To Communicate A Salary Sacrifice Scheme To Your Employees

Communicating is key when it comes to how successful your EV scheme is. It goes way beyond just setting it up. You need to pique the interest of your employees and educate them about salary sacrifice schemes. For this, you need a plan of action. Here are the best ways to communicate your new employee benefit to the team.

• Company wide email – provide an overview of the scheme and how it works
• Staff meetings – a chance to explain the scheme further and talk about benefits
• Webinars – a more visual and interactive way of discussing the EV scheme
• 1-2-1’s – allows employees to ask questions in a private setting.

Best UK Salary Sacrifice Electric Car Schemes 2022

To help you find the right salary sacrifice electric car scheme for your company, we’ve listed some of the best car lease companies below.

Octopus EV has over 65 models to choose from. They provide companies with everything they will need to set up and run their electric vehicle scheme. What’s even better is that they also supply a free home charger with installation if the driver has on-street parking, or 5,000 free miles if not.
loveelectric offers an impressive range of EV models as an independent broker. It doesn’t matter your budget, they’ll be an electric car that suits everyone’s needs. They also have partnerships with PodPoint and RightCharge for home chargers and energy tariffs.
Tusker is a carbon neutral company offering salary sacrifice car schemes to companies in the UK. Their cars are customisable, from the colour of the exterior and interiors, to extra features that make the car more personalised.
The Electric Car Scheme works with many EV providers to help companies get the best lease deal for their employees. They provide an all inclusive package that includes an employee portal, and help manage the potential risk for employers.
LeasePlan offers car leases to all kinds of businesses, no matter how big or small. Their scheme lets staff pick a new vehicle from an approved list every two to three years. The company also offers charging solutions and consultancy services to help with the scheme process.
WeVee’s salary sacrifice electric car scheme has a dedicated team to help you set up the scheme and calculate savings. They offer a presentation to use that shows how an electric car scheme fits in your company.
Novuna’s salary sacrifice includes the essentials, such as insurance, servicing, and maintenance. They can include up to three extra drivers on the insurance policy. Their scheme can save staff between 22% and 46%.

Compare Employee Benefit Quotes And Get Expert Advice

We understand that setting up a valuable employee benefits package can be challenging for companies, which is why we’re here to help. There’s a lot to consider and many decisions to make.

At Drewberry™, we do all the hard work for businesses to help them set up their employee benefits, ensuring your team is getting the most value.

Compare employee benefit quotes and get free expert advice from one of our financial advisors. You can call us on 02074425880 or email us at help@drewberry.co.uk.

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