Everything you need to know about EV salary sacrifice schemes

How they work and why they’re good for business

Since the introduction of 2% Benefit in Kind tax savings for low emission cars, the demand for electric has rocketed. Here at Tusker, almost all of our company car drivers have either an electric or hybrid cars and we encourage our salary sacrifice drivers to go electric too. In fact, over 70% of our eligible employees have a car on the scheme and only two non ULEV cars have been ordered since 2019.

In a nutshell, salary sacrifice schemes are where an employee gives up an amount from their gross salary in exchange for a non-cash benefit, such as childcare vouchers, pensions or a car. The employee saves the income tax and NIC, and the business saves the Class 1 NIC, on the salary that has been sacrificed.

For cars, employees also get a brand new, maintained car at corporate rates, and save most of the VAT they would pay on a personal lease. If only pure electric and ultra-low emission cars are offered there should be a significant overall saving for both employer and employee in BiK tax and Class 1A NIC.

For employers, implementing an EV salary sacrifice scheme is straightforward and comes with a whole host of benefits, from cost-savings to staff retention. For employees, getting a new electric or hybrid vehicle via their company scheme could save them on average £181 a year* and gives them peace of mind.

Employer benefits of Salary Sacrifice

Offers a staff perk which will attract and retain employees
Can help businesses gain carbon neutral status
Provides considerable savings through lower NI contributions
Dedicated support means schemes are easy to implement and maintain without added admin hassle
Risk protection included for peace of mind in the event of employees going on sick leave, leaving or being made redundant

Employee benefits of Salary Sacrifice

Cost effective way of getting a new car
Pay 2% Benefit in Kind until 2025
Lower fuel and running costs
Insurance, servicing, road tax and breakdown assistance included

So with an EV car salary sacrifice scheme being win-win for your business and your staff, what do you need to consider to get started?

Drivers will need support to understand how practical plug-in cars can be and how significant the savings could be for them. You can help employees lose any preconceptions they may have about going electric, explain the jargon and encourage them to test drive some ULEVs.

The main misconceptions you’ll face are battery range and charge time. Range is constantly improving and most weekly commutes can easily be accommodated by an EV and the electric range of most PHEVs, saving significant amounts of money and greatly reducing pollution. With over 35,000 public charge points in the UK, it’s also easier than ever to re-charge. Plus, overnight charging options at home are a cost-effective way to manage your EV.

Work with a provider that can offer a wide range of models – you need to have something for everyone. Include BEVs, self-charging hybrids (known as mild hybrids) and PHEVs (plug-in hybrid electric vehicles) to start. Having a variety of options means choice both for drivers who tend to only make short, local journeys, and choice for drivers who cover more motorway miles or who need a longer range.

Here at Tusker, we’re passionate about electric and top of the team’s favourite EV and hybrid cars are:

Peugeot 3008 SUV Hybrid

30-mile battery range
0-60mph in five seconds
Charges in under two hours

Mitsubishi Outlander Plug-in Hybrid

Popular choice and UK best-seller
28-mile battery range
Battery-save mode for motorway driving

BMW I3 EV

180-mile battery range
0-60mph in seven seconds
The reliability and style you’d expect from BMW

Peugeot e-208

0-60mph in eight seconds
Full charge range of over 200 miles
Apple CarPlay and Android Auto as standard

We’ve helped more than 600 businesses either switch to or to launch a green car salary sacrifice scheme. As we move out of Covid-19 restrictions and slowly return to the workplace, now is the perfect time to give your employees news of a positive change.

Besides communicating effectively and ensuring you are offering a comprehensive range of EV and hybrid options, it’s important to review your car and fuel policies, consider charge point installations at your workplace and run feasibility studies across your business. Once you’re set up to go green and implement your EV car salary sacrifice scheme, you’ll never look back.

Tusker are market leaders in car salary sacrifice schemes and green fleets. We can advise you on what’s suitable for your business and the practicalities of how you can implement a new scheme successfully. Give our team a call and let’s get your business greener and leaner.

Get in touch

*those ordering a new car through salary sacrifice in the past 12 months have saved an average of £181 on Tax and National Insurance. This will vary based on salary and amount sacrificed.