Salary sacrifice schemes allow you to go electric for cheaper - beneficial for both employers and employees.
Salary sacrifice schemes allow employers to offer an attractive and cost-effective benefit to their employees which is HMRC and VAT compliant.
The electric car salary sacrifice scheme allows employees the opportunity to drive a brand-new, fully insured and maintained electric car for significantly less than if they leased one privately.
The scheme works in the same way as other salary sacrifice incentives such as childcare or cycle-to-work and has been designed to help transition more company car drivers from conventional to electric cars.
An employer will engage with a vehicle leasing company (e.g. Peter Vardy Leasing) and arrange the lease of a pure-electric car at an agreed rate on behalf of their employee. The employer provides the car to the employee as a company car in return for a salary contribution each month, otherwise known as a salary sacrifice.
The cost of the car is deducted from the employee’s gross salary, meaning their income tax and National Insurance Contributions (NIC) are calculated based on the lower salary amount. Effectively, the employee will pay lower contributions towards income tax and National Insurance each month.
And it’s not only employees who benefit from cost savings. Employers will also pay reduced NIC each month as they will be paying their employees based on the lower salary amount, after the cost of the car is taken.
If you would like further information relating to the electric car salary sacrifice scheme, please fill out the Enquire Now form below and a member of the team will contact you shortly.