As we move into a more environmentally conscious future, companies worldwide are exploring ways to provide eco-friendly and sustainable employee benefits. One of the most innovative solutions in this space is offering electric cars as an employee benefit, supporting their team to make more environmentally friendly decisions.
In this article, we explore how electric cars can be made affordable and accessible through EV salary sacrifice schemes, empowering employees to embrace sustainability and reduce their carbon footprint – and support their company’s journey to net zero.
Salary sacrifice schemes are a popular way for companies to provide their employees with valuable benefits while reducing overall costs. These schemes involve employees giving up a portion of their pre-tax salary for a non-cash benefit. You may have heard of other salary sacrifice schemes such as pension contributions, childcare vouchers, and cycle-to-work schemes.
An EV salary sacrifice scheme works no differently. Instead of purchasing a car outright or signing up for an expensive personal loan arrangement, an employee can agree with their employer to lease an electric car through salary sacrifice. The lease cost is deducted from the employee’s pre-tax salary, reducing their Income Tax and National Insurance contributions, resulting in a lower taxable income and increased take-home pay.
The potential tax savings are massive. With a tiny Benefit in Kind tax rate on electric company cars – currently at just 2% – drivers can save between 30% and 60% on a brand new electric vehicle.
The benefits of EV salary sacrifice schemes are twofold. Employers can offer an attractive and competitive perk to attract talented employees to their company without incurring extra costs – while dramatically reducing their Scope 3 carbon emissions. Also, employers can increase employee satisfaction and retention by offering electric cars at a massively discounted rate.
For employees, EV salary sacrifice offers access to a new car at a lower cost than if they were to purchase them privately. This makes electric vehicles more accessible and affordable for employees who may not have been able to consider them otherwise. In addition, by reducing their taxable income, employees may also be able to reduce their tax liability.
Implementing an electric car salary sacrifice scheme can be a simple yet transformative process for companies. By offering this inventive employee benefit, companies can demonstrate their commitment to sustainability and attract top talent while reducing their carbon footprint.
Electric cars are becoming increasingly popular due to their environmental benefits, lower running costs, and reduced emissions. By implementing an electric car salary sacrifice scheme, companies can help their employees switch to electric vehicles and contribute to a greener future.
Setting up an EV salary sacrifice scheme couldn’t be more simple. Employers must ensure they have the necessary agreements and contracts in place, including the lease agreement, salary sacrifice agreement, and any other relevant documentation. They must also communicate the details of the scheme effectively to employees and provide them with any necessary information or training.
Ensuring the scheme is set up correctly from the outset is essential to provide clarity and understanding. Employers should seek professional advice to ensure all legal and financial requirements are met or work with an EV salary sacrifice provider to outsource the administration.
Promoting the electric car salary sacrifice scheme to employees is essential for its success. Companies should communicate the benefits clearly and explain how the perk works. They should also ensure employees can access supporting materials or guidance, such as advice on using electric cars and charging infrastructure.
Employers should also consider offering incentives to encourage employees to participate in the scheme. For example, they could offer free charging at work or provide additional benefits; such as free fleet car insurance.
Most importantly, a great EV salary sacrifice provider won’t leave you in the dark once you’ve signed up. With the right provider in your corner to support you in promoting the scheme effectively, employers can encourage employees to make the switch to electric vehicles and contribute to a greener future for all.
Electric cars offer numerous benefits over petrol-fuelled vehicles, from reduced emissions and cost savings to a smoother and more enjoyable driving experience. By offering electric cars through salary sacrifice schemes, companies can empower their employees to embrace sustainability and reduce their carbon footprint. The benefits are mutual: employees can access affordable electric cars, while employers can demonstrate their commitment to sustainability and attract top talent. Electric cars are the future of transportation; EV salary sacrifice schemes are an excellent way to make them accessible and affordable for all.