As electric vehicles continue to gain popularity, it’s crucial for businesses to consider how they can help their employees take advantage of the benefits. Employee wellbeing plays a significant role in attracting, retaining, and motivating employees, making it essential for businesses to offer appealing perks.
One benefit that has seen a surge in popularity in recent years is the electric car salary sacrifice scheme. There are multiple reasons why businesses should consider implementing this scheme for their employees:
1. Lower Benefit in Kind tax: Electric cars offer a significant tax advantage compared to petrol and diesel vehicles. The Benefit in Kind (BiK) rate for electric cars is currently set at 2%, with incremental increases to 5% by April 2028. This is substantially lower than the rates for traditional vehicles, making electric cars a more cost-effective option for employees.
2. Up to 40% savings on lease costs: Employees who opt into a salary sacrifice scheme can save up to 40% on the cost of leasing a new electric car. By reducing their income tax and National Insurance contributions through the scheme, employees can enjoy significant savings on their monthly lease payments.
3. No deposit or credit check required: The electric car salary sacrifice scheme eliminates the need for employees to pay a deposit or undergo a credit check. All cars are leased by the company on behalf of the employee, making it a hassle-free process for the employees.
4. Savings on running costs: In addition to tax benefits, employees can also save on daily running costs with electric cars. Charging the vehicle at home during off-peak hours, exempt road tax until 2025, and maintenance services included in the lease package all contribute to cost savings for employees.
Setting up an electric car salary sacrifice scheme is made easier by partnering with a specialist provider like ElectriX. Working with a dedicated account manager, businesses can tailor the scheme to their specific needs, assess eligibility, and efficiently manage the administrative aspects of the scheme.
To make the most out of the scheme, businesses should ensure they have the support of a dedicated account manager, utilize software to automate enrollment and management processes, designate a team to oversee the scheme, and provide clear communication to employees about the enrollment process and ongoing support.
Ultimately, implementing an electric car salary sacrifice scheme not only benefits employees but also helps businesses attract and retain top talent while supporting their ESG goals. To learn more about how your business can benefit from this scheme, contact ElectriX today.
