Electric car salary sacrifice scheme

A salary sacrifice car scheme allows you to exchange part of your pre-tax salary for a brand-new electric car. This can reduce your taxable income and save you money on tax and National Insurance contributions.

By sacrificing part of your salary before tax is applied, you will see a reduction in your take-home pay.

Salary sacrifice does affect your pension contributions, as the sacrificed amount is deducted from your gross salary before pension contributions are calculated.

Like anything, there are downsides to salary sacrifice. The main two are you can only get an EV on this scheme and reducing your take-home pay can limit borrowing elsewhere (i.e. mortgages).

In most cases, employees have the option to opt out of salary sacrifice schemes, although this may vary depending on the specific benefits and employer policies. You should check with your HR department.

Your employer will provide information and guidance on setting up a salary sacrifice arrangement, including eligibility criteria, available benefits, and the process for opting in or out of the scheme. If they do not have a scheme, get in touch and we can provide you with an employer pack to give to them.

Salary sacrifice schemes may be available to all employees, but eligibility and participation may vary depending on employer policies.

A salary sacrifice car scheme allows employees to exchange part of their pre-tax salary for a leased vehicle, typically saving on income tax and National Insurance contributions.

Implementing a salary sacrifice car scheme can reduce employer National Insurance contributions, enhance employee benefits, attract talent, and support environmental sustainability initiatives.

Employers can typically offer a wide range of new cars, including electric, hybrid, and low-emission vehicles, through a salary sacrifice scheme, providing employees with choice and flexibility.

Eligibility criteria may vary, but typically employees need to have a regular income, be eligible for a company car, and agree to the terms of the salary sacrifice agreement. They also cannot sacrifice an amount which leaves their take-home less than minimum wage.

Implementing a salary sacrifice car scheme may require adjustments to payroll systems and reporting processes to accurately calculate employee salaries, deductions, and benefits. We'll provide you with an online portal where all of this is managed.

While salary sacrifice car schemes can result in savings on employer National Insurance contributions, there may be tax implications depending on your company. Please get in touch to find out more about tax implications.

Get in touch with us and we can set up a salary sacrifice car scheme, for free, which involves communicating with employees, establishing eligibility criteria, and implementing administrative processes.

Employers must comply with HMRC regulations, employment law, and data protection requirements when implementing a salary sacrifice car scheme, ensuring transparency and fairness for employees.

Effective communication is crucial to promote the benefits of a salary sacrifice car scheme to employees, including potential tax savings, vehicle choice, environmental benefits, and convenience. Once we set up your scheme, we can arrange a launch day at your office or a location of your choice.

Managing a salary sacrifice car scheme requires ongoing administration, including monitoring employee participation, updating payroll records, managing lease agreements, and providing employee support and guidance. This is made easy and done through our online portal.