Is an EV Salary Sacrifice scheme right for your business?
As businesses and individuals alike aim to reduce their carbon footprint, the demand for electric vehicles (EVs) continues to surge. However, the cost and logistics of switching to EVs can be daunting for many. That's where solutions like an EV Salary Sacrifice scheme come into play.
What is an EV Salary Sacrifice scheme?
An EV Salary Sacrifice car scheme is a perk that you, as an employer, can provide to your employees. It's a flexible and low -cost method of providing your employees tax-efficient access to new EVs, without the financial commitment or up-front costs of outright purchase.
How does an EV Salary Sacrifice scheme work?
The process is straightforward:
Why are EVs a popular choice for Salary Sacrifice schemes?
What to consider from a company fleet perspective
There are plenty of pros for both company and employees when it comes to EV Salary Sacrifice schemes, but it’s important to consider the practicalities too.
Who should have access?
A Salary Sacrifice car scheme can be a powerful incentive for hiring and retention of your employees, so you’ll need to decide if you want to choose to open the scheme up to all employees, or only to certain levels or job roles. Be conscious that employees at lower salary bands may not be suitable for the scheme, since it could theoretically cause their take-home salary to fall below the legal national minimum wage.
How can you gauge interest?
Some drivers might prefer to stick with petrol or diesel vehicles (especially if they’re used to travelling long distances and wary of an EVs charging range). A survey or informal discussion can help gauge interest in advance and plan for whether or not it’s worthwhile setting up a scheme.
Is it worth investing in charging infrastructure?
Your employees’ EVs will need charging, so check that public chargepoints are available nearby, and consider whether (if take-up is likely to be high) it’s worth installing workplace chargepoints. You can find out about grants available for workplace and domestic chargepoints in our guidance.
Can you afford scheme leavers?
Identify and mitigate any financial risks such as the potential costs of early termination of the lease due to long-term sick leave, redundancy, or a decrease in salary. Collaboration with your supplier to cover such risks is essential.
Does it complement existing benefits?
Consider how the salary sacrifice scheme will integrate with any existing benefits schemes. For instance, it could complement a traditional company car scheme.
How will you let employees know?
Effective communication is key. Ensure that eligible employees understand the scheme, how it works, and the potential benefits it could bring to them.
