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It works a bit like the cycle-to-work scheme but supercharged.
The employee chooses the electric car they want, and instead of buying it outright, the employer leases the car in their name.
An amount is deducted from the employee's salary every month to pay the rental (that’s the “sacrifice”).
As the money comes out of their salary before Tax and National Insurance Contributions (NICs), there are huge savings to be made.
Plus, the employer makes NIC savings too.
There isn’t one. Salary Sacrifice is just a really tax-efficient way for employees to drive a fully maintained brand-new electric car.
Whilst they do need to pay Benefit in Kind tax (BiK) because they’re receiving a non-cash benefit from their employer, the rates are exceptionally low for electric vehicles at just 2% of the P11D value of the car until 2025.
Compared to diesel and petrol, this represents a huge saving because their BiK rates are much higher (up to 37%).
When the employer has joined the scheme, they ultimately decide who is eligible.
As a minimum, to participate in the scheme:
The most obvious benefit is the tax saving, but you also benefit from quite a few extras as well.
Excess mileage charges
If you go over the agreed mileage, you will be asked to pay excess mileage charges.
Parking fines and congestion charges
Are always the responsibility of the driver.
End-of-contract damage recharges
You pay recharges when the vehicle or accessories have not been used, maintained or looked after as agreed within the agreement. Vehicles are appraised using BVRLA Fair Wear & Tear guidelines.
Early termination fees
These are dependent on your company’s scheme, but fees are likely in circumstances of resignation, redundancy and parental
leave. Contact your employer for further information.
If you lose your licence due to ill health (or death) or are long-term sick and unable to work, you can simply return the vehicle.
Choose your car
Your company will send you a welcome email with registration details and a link to the Employee Portal.
Pick your mileage
You want to avoid excess mileage charges, so it’s best to be as precise as possible about the miles you’re likely to drive in a year.
Select your contract length
Your monthly payments for servicing, maintenance and insurance will be fixed for the duration of your agreement.
Add additional drivers
If you need to add a spouse, partner or named driver the insurance rate is guaranteed for the length of the agreement.
Spec your car + extras
It’s straightforward, really. It’s totally up to you how you configure the car you want.
Electric vehicle experts
Independent and impartial advice at every turn.
Brand-new electric cars
Choose from all the latest and best electric vehicles on the market.
All-inclusive package
Maintenance, tyres, road tax, MOTs, and breakdown assistance are all included. Plus, comprehensive insurance is standard.
5-star service
We’ve been rated 4.7/5 for customer experience on Feefo. So, you can rely on excellent service.
Our electric vehicle specialists are on hand to support you with expert impartial advice, like helping you choose your brand-new electric car, and much more.
Have a burning question you want answered? Check out our Salary Sacrifice FAQs page.
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