Offering an impressive list of company benefits is a perfect way for employers to keep staff happy and recruit the best talent.
However, we know that splashing out on expensive healthcare benefits or free food in the office isn’t cheap and the healthy amount of investment required comes with no guarantee of return.
That’s why salary sacrifice schemes are so great. They’re free to set up and not only give employees a real and useful benefit they’ll net both the company and the staff member tax savings. What’s not to love?
For a full rundown of how salary sacrifice schemes work, check out our complete guide here.
What are the advantages of Electric Vehicle Salary Sacrifice Scheme?
Let us give you an overview of how you as an employer can benefit…
1. Tax benefits
A salary sacrifice scheme not only reduces income tax and National Insurance Contributions (NIC) for employees but for you as the employer, too. And as with any business lease, you may be able to recover the VAT on the rental and maintenance, further helping your bottom line.
2. Improve your eco-credentials
Opting for an EV scheme will reduce your overall carbon footprint and help you achieve your corporate sustainability targets. But showing you are serious about this not only looks good on paper. Many customers are keen to see the businesses they work with making positive environmental changes. Similarly, job hunters will look at how sustainable potential employers are, so being proactive in this area can make you really stand out above others.
3. Help staff make the EV switch
Many people want to make the switch to an electric car, whether driven by a desire to go green or in preparation for the 2030 ban on petrol and diesel cars. However, the cost to buy an electric car outright can be prohibitive. Supporting employees with a salary sacrifice scheme means they can lease an EV for a fraction of the cost. Not only that, with a lease they can upgrade at the end of a contract with no extra cost and they don’t have to worry about residual values. A win win.
4. Retain and recruit the best talent
Studies reveal that 75% of employees would like an electric car salary sacrifice scheme yet a large percentage of companies don’t offer such a scheme. Think about that. If you’re one of the minority of firms that do offer such a benefit, you’ll be in a much better position for recruiting new employees who might be choosing between two companies. The same goes for retaining staff: keep your employees happy and not only will they stay but they’ll be more invested in going the extra mile for you.
5. Reduce your “grey fleet” risk
If you have a lot of people in your company who drive personal cars for business use then you have a sizable “grey fleet”. You don’t have any control over these cars and no guarantee that they’re being well maintained or projecting the right image for your company. By switching to an EV salary sacrifice scheme, you’ll know what your staff are driving and have peace of mind that they’re being well maintained without the need for a full-blown fleet leasing agreement.
Why choose the GRIDSERVE Electric Vehicle Salary Sacrifice Scheme?
There’s plenty of reasons to choose the GRIDSERVE Salary Sacrifice Scheme, not least the fact that we offer the choice of any electric car in the market backed up by our industry-leading EV charging infrastructure – and that includes our award-winning Electric Forecourts® with EV Gurus on hand to provide expert advice.
We’ll also provide roadshows across the UK; helping to support your employees in making the switch with expert advice and demo fleets that are ready to test drive before signing up – with all insurance covered by us.
How do I set up an electric car salary sacrifice scheme?
Schemes are completely free to set up and don’t require the same amount of management as a fleet. Working with a dedicated electric car salary sacrifice provider, such as GRIDSERVE Car Leasing, most of the strain will be taken off your plate. They’ll provide the car, the leasing terms, plus insurance and servicing programmes.
Are employees on variable income eligible for salary sacrifice schemes?
The simple answer is yes. But, of course, there are many permutations that you need to consider. Firstly, any arrangement cannot reduce the employee’s cash earnings below the National Minimum Wage.
If pay fluctuates so much that their pay bounces between tax brackets, then things get a little more complex. This is because the amount they pay towards their taxable benefit will vary and at the end of the financial year it’ll have to be recalculated for over or under payment.
The same goes for those employees who get a sizable bonus, as this can impact NIC and income tax both monthly and annually. Every individual will be slightly different so talk through the circumstances with your staff member and contact your scheme provider for any advice.
The good news, though, is that none of these complexities prevent employees taking advantage of an electric car salary sacrifice scheme.
What happens to the car if a staff member leaves their job?
In most cases, if an employee resigns, they’ll need to return the car and pay an early termination fee, which is deducted from their final pay packet. The amount will be based on the cost of the lease and remaining time left on the contract. They’ll also have to pay for any damage or excess mileage fees.
Sometimes, the new employer may be willing to transfer the lease into their name and continue operating the salary scheme for the employee.
With the GRIDSERVE Electric Car Salary Sacrifice Scheme we include a Risk Protection Policy within the cost that protects you if staff leave, go on maternity leave or suffer long-term illness.
What happens to the car if a staff member goes on maternity or paternity leave?
The employee will continue to have use of the vehicle, with the company and funder covering payments if pay falls to statutory minimum amounts. You’re not bound to provide financial assistance and can set up a repayment plan. Talk to your HR and finance department about what you want the policy to be and agree with your staff member.
If your scheme is with GRIDSERVE, our Risk Protection Policy will cover you.