Salary sacrifice is a fantastic option for companies looking to offer their employees a brand new electric vehicle that can also be fully insured and maintained. This scheme allows employers to lease electric cars to their employees, with the costs deducted from the employees' salary as a non-cash benefit. This is a tax-efficient way of offering an incentive to employees, as it can result in additional Tax and (NICs) savings.
The popularity of salary sacrifice for net-zero electric car schemes is rapidly increasing, as they are often more affordable than petrol or diesel alternatives. The benefit-in-kind on net-zero subsidies is currently only 2%, making the clean electric vehicle transition an easy and cost-effective option for both employers and employees. Typically, zero-emission cars (electric cars) are chosen for salary sacrifice schemes because of the low benefit-in-kind rates.
The fixed-cost motoring packages offered under salary sacrifice schemes usually include full maintenance and servicing, tyres, breakdown recovery throughout the UK and Europe, vehicle insurance, and a choice of charging points. Although it may take some consideration to take home less of your salary in exchange for a brand new car, the significant savings for both employers and employees make it well worth the investment. To calculate and compare salary sacrifice savings on any car of your choice, check out the AVC website, which uses standard tax codes and salary examples for calculations.