Demand for salary sacrifice on ultra-low emission and electric vehicles has seen a significant rise in recent months.
As the cheapest method of funding a ULEV and EV, Grosvenor Leasing has seen a surge in interest, with companies and their drivers keen to take advantage of the significant benefits salary sacrifice schemes have to offer.
“Salary sacrifice was already growing in popularity due to the very low benefit-in-kind (BIK) tax for ultra-low emission and electric vehicles,” said Lee Brown, managing director of Grosvenor Leasing.
“However, after the Chancellor confirmed in the Autumn Statement that BIK on EVs was set to remain low, with only a one percentage point year-on-year increasing for three years from 2025, this triggered even greater interest.
“Until then, some companies had been hesitant about committing to a scheme without clarity about the long-term tax implications on electric vehicles.
“However, with that reassurance in place businesses are able to implement a salary sacrifice scheme knowing it will provide savings to their drivers, and the company, for many years.”
A Salary Sacrifice scheme enables an employee to exchange a portion of their salary for a non-cash benefit – in this case a fully funded, maintained and insured company vehicle.
In exchange for a portion of their salary, the employee’s Income Tax and National Insurance contributions reduce when they then choose a ULEV or EV that enjoys very low Benefit in Kind tax (BIK).
Grosvenor Leasing’s Salary Sacrifice scheme is very straightforward to implement and comes with industry leading risk protection; for instance if an employee leaves the company or goes on extended sick or maternity/paternity leave.
Companies can implement the scheme with complete peace of mind, and without being overwhelmed with lots of administration.
To give a flavour of the potential savings of salary sacrifice compared to an employee funding a car through a personal lease, a 20% tax payer choosing a Peugeot E-208 Electric Hatchback 100kW Active Premium 50kWh 5Dr Auto on a 3 year lease, covering 10,000 miles per annum would save £168.61 per month.
A 40% tax payer choosing a Tesla Model 3 Saloon RWD 4Dr Auto with 15,000 miles per annum over 3 years would save £318.60 per month.
A 40% tax payer choosing a Porsche Taycan Saloon 300kW 79kWh 4Dr RWD Auto [5 Seat] with 10,000 miles per annum over 3 years would save £491.00 per month.
“At Grosvenor Leasing, we manage everything for the customer including payroll reports, contract variations and the full in-life management of the vehicle including maintenance, accidents etc. There is also a free work charger for every 5 orders,” continues Lee.
“All the employer has to do is authorise orders with living wage checks, deduct the employee’s salary and carry out P11d reporting, which Grosvenor provides to them in a report. Any recharges are also charged direct to the employee rather than the company.”