Can I Get a Salary Sacrifice Car?

This blog is quite a revelation. For years we’ve been trying to educate on electric cars and salary sacrifice; It’s wonderful to write a blog on a topic that many people have now actually heard of! Of course, more information is sought, that’s why you’re here, right? Welcome to the latest information on salary sacrifice cars! If you want more news like this then sign up for our marketing list here, get the Electric Revolution guide while you’re at it! For now, though, let’s explore the question: “Can I Get a Salary Sacrifice Car?”.

Salary sacrifice has been used over the years for everything, from gym membership to childcare vouchers. However, it’s not available to all. There are some rules set by HMRC, which means some reading this are about to be disappointed.

Where do we begin?

First, in order to take anything via salary sacrifice, you have to commit for a period. Then, you have deductions from GROSS pay made by your employer. The savings are made through tax and NI. You do have to be a permanent employee and must have a sufficient salary to sacrifice. This is because your employer can’t reduce your salary below the living wage. If you are paid as a partner or you’re a contractor, this won’t work for you.

What’s next?

Secondly, please be aware that the scheme doesn’t work for every car. You get some huge savings upfront from salary sacrifice, however, there is a ‘tax’ on the benefit at the back end. The government want you to make sensible choices for the environment and your pocket. Thus, the cleaner the car you choose, the bigger the saving you retain. Electric cars have a tiny tax on the benefit, whereas diesel cars incur so much tax that it wipes out all the savings and more! You could well pay more via salary sacrifice for diesel than retail, making the only winner Rishi Sunak!

If you do have a permanent contract and earn above the living wage, salary sacrifice schemes are brilliant! Even more so when combined with electric cars. You just need to convince your employer, with no real leaver risk and no cost to them, why wouldn’t they go for it?

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