Could an electric vehicle salary sacrifice scheme help you save money?
If you’re thinking about switching to an electric car, it’s worth finding out whether your employer offers an electric vehicle salary sacrifice scheme.
These schemes can make driving an electric vehicle more affordable, potentially helping you save money while reducing the environmental impact of your journeys.
How does salary sacrifice work?
A salary sacrifice scheme allows you to exchange part of your gross salary for a benefit provided by your employer, such as an electric car.
Because the payments are taken from your salary before Income Tax and National Insurance are calculated, you could make savings compared with leasing a vehicle privately.
You’ll normally pay Benefit-in-Kind (BiK) tax on the vehicle, although fully electric cars benefit from relatively low rates compared with petrol and diesel vehicles.
Depending on the scheme, your monthly payments may also include insurance, servicing, maintenance and breakdown cover, making it easier to budget for the costs of running a car.
Is it right for you?
The savings available will depend on your salary, tax circumstances, the vehicle you choose and the terms of your employer’s scheme.
It’s also worth considering how salary sacrifice could affect other benefits linked to your salary, such as pension contributions or statutory payments.
If you’re interested, ask your employer whether they offer an electric vehicle salary sacrifice scheme and request a personalised quotation before deciding.
Find out more
For further information about salary sacrifice arrangements and how they work, visit the GOV.UK website.