Are you a company wondering what exactly a salary sacrifice scheme for electric vehicles is? Then keep reading!
The basics
Its a way for companies to offer leased electric vehicles to their employees as a work benefit with huge tax savings for the employee.
How does it work?
- The company leases the car from the lease provider directly
- The company and the employee agree to give the employee the car by sacrificing a proportion of their gross salary
Massive savings for the employee
Because the employee is paying for the car with their gross salary (pre tax), there are huge cost savings on tax and national insurance. The employee saves between 20 and 50% on the cost of any electric car!
Savings for the company
The company will see also natural reductions in national insurance payments because of the reduced salaries of their employees. In addition, they are able to reclaim VAT on the lease and costs associated with salary sacrifice.