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Salary Sacrifice Cars - How Do They Work?

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  • What Are Salary Sacrifice Schemes?

What Is A Salary Sacrifice Car Scheme?

A salary sacrifice car is a vehicle leased from a third-party supplier through a partnership with your employer, where an employee opts to sacrifice a portion of their gross salary in exchange for the use of this car.

Salary sacrifice works similarly to cycle-to-work schemes and childcare vouchers. It gives employees access to lots of different savings by leveraging our business discounts and the savings on tax and NI that come with it.

For more information on salary sacrifice, check out our helpful all you need to know guide or drop us a call/email to discuss with the team.

Employer Zone

Perfect for HR & those responsible for employee benefits, company cars, or green initiatives.

Employee Zone

Perfect for employees looking to move into a brand new car for less.

Why choose Fleet Evolution for my Salary Sacrifice Scheme?

Choosing Fleet Evolution shows your belief in working with an experienced and trusted company, one that puts business and green policy first. We also:

  • Launched the UK’s first electric car scheme in 2012
  • Offer simple, low-risk, and low-admin schemes
  • Can introduce the scheme for any sized business
  • Offer free carbon reporting

Did we also mention the scheme is free to implement?

Our vision and commitment lies with promoting ultra-low emission vehicles and sustainable car ownership for the UK’s employees.

Not only do we deliver schemes in a day, but we also handle all engagement, ensuring a smooth transition for your employees. Our dedicated team also manages HMRC submissions and contract variations, assuring compliance and ease for your company. With Fleet Evolution, you’re choosing a partner leading the way in green vehicle initiatives in the UK.

Fleet Evolution Tamworth office

Benefits for Employees of a Salary Sacrifice Scheme

The idea behind salary sacrifice is simple; you give up part of your gross (pre-tax) salary for a non-cash benefit in return. In our case, this will be a green car. How will a green salary sacrifice car benefit the employee?

  • Save on motoring costs – reduced tax and National Insurance contributions
  • Less stress – your breakdown, servicing, tyres, maintenance, insurance, and more is included in your cost
  • Save even further on the Benefit-in-Kind tax (company car tax) compared to petrol/diesel cars)

As you’re paying monthly and saving through the above, you’re spreading out the cost and spending less than you would to buy the car upfront. Salary sacrifice is one of the best options for employees to get their hands on a new car.

Benefits for Employers of a Car Salary Sacrifice Scheme

Employers experience a range of benefits when introducing salary sacrifice into their company. The main one is that are making their employees happy, of course. How else will they benefit?

  • Free employee benefit with minimal risk and low admin
  • Greener fleet = reduced company CO2
  • Happier employees = more productive employees
  • Savings on employers’ NIC (as pension and car salary sacrifice is exempt)

Environmental Benefits of Electric Car Salary Sacrifice

Green cars are better for the environment, but how much greener are they?

  • Electric cars produce zero emissions – reducing air pollution considerably
  • Charging EVs uses significantly less CO2 than refuelling ICE vehicles
  • Sustainable charging options – renewable energy tariffs and home energy solutions (solar panels) to recharge your EV

As the owner of an electric vehicle, you will be less dependent on fossil fuels. And recharging an electric car will not add a significant amount to your energy bills. In fact, you would spend around the same amount as running 4-plasma TVs in your home, 24/7.

Electric cars help you make the most out of a salary sacrifice scheme. You can access brand-new cars with tax benefits, save money on fuel, and avoid the use of petrol/diesel.

Getting An Electric Vehicle With A Salary Sacrifice Scheme

Companies like ourselves at Fleet Evolution actively encourage the use of Electric vehicles within Salary Sacrifice Schemes. It is more cost-effective to buy an electric vehicle this way because you will be saving on the whole price of the car, not just some of it.

Transferring your company cars to electric vehicles will help improve the environment and reduce your carbon footprint. It will also make you a role model for other companies to follow in terms of environmental awareness.

How Can I Get an Electric Car Through Salary Sacrifice?

If you’re keen on driving an electric vehicle and want to take advantage of our salary sacrifice scheme, here’s a step-by-step guide to help you through the process:

1. Speak with your Employer

Talk to your employer and ask if they already have a scheme with us in place, or if they are willing to introduce one. With Salary Sacrifice Schemes, you can exchange a portion of your pre-tax salary for a brand-new electric car and make savings on your tax and National Insurance contributions. If your employer needs some convincing, send them our All You Need to Know guide or see if they’re willing to jump on a call with our Onboarding team.

2. Quoting

Once your employer is happy to go ahead, they can simply fill out our scheme agreements and wait 1-2 days for approval and set-up. When your scheme is up and running, you can request your login to the quote engine here. It will take 1-2 business days to receive your personalised login. Then, it’s time to start quoting!

We have a Quote Engine walkthrough video, and the Driverline team are on hand to help. They will give you the best advice based on your personal requirements, helping you choose the right EV that suits both your needs and budget.

3. Ordering and Delivery

Once you enter your requirements and find your perfect car, save your quote and speak with the Driverline Team. After finalising your choice and completing the necessary paperwork, your brand-new electric car will be delivered to your preferred location. This ensures a hassle-free experience, allowing you to enjoy your new ride without any holdups.

4. Monthly Payments

The cost of the electric car will be divided into manageable monthly payments. These payments will be automatically deducted from your pre-tax company salary. This not only provides financial benefits but also simplifies the payment process.

If you follow these steps, you’ll be jumping into your new electric car in no time! Promoting a greener mode of transport while enjoying the financial perks it brings, what a green legend. Remember, Fleet Evolution is here to guide you every step of the way, ensuring you make the most of this great opportunity!

How do I Introduce a Salary Sacrifice Scheme for my Company?

Introducing a salary sacrifice car scheme can be a game-changer for employers and employees. It promotes the use of electric vehicles while offering numerous financial benefits. If you’re an employer looking to integrate this scheme into your company’s benefits package, here’s a step-by-step guide to get you started:

1. Research the Benefits

You should understand the advantages of a salary sacrifice car scheme. This includes income tax savings, promoting eco-friendly electric vehicles, and enhancing your company’s green credentials. It can also be valuable to your employee benefits package; making your company more attractive to potential recruits, and even helping retain employees.

2. Engage with Stakeholders

Discuss the idea with key company stakeholders. This may include senior management, HR, and finance teams. Highlight the benefits of offering electric vehicles as a company car option through the salary sacrifice scheme.

3. Choose a Reliable Partner

Partner with a reputable provider, such as Fleet Evolution, who specialises in salary sacrifice car schemes. They will guide you through the intricacies of the scheme, ensuring a smooth implementation.

4. Promote the Scheme

Once the scheme is in place, promote it to your employees. Highlight the benefits of driving electric over petrol and diesel vehicles, plus the significant financial savings they can make and the positive environmental impact.

5. Ongoing Support

Ensure you provide ongoing support to employees who apply for the scheme. This includes addressing any queries they may have and ensuring they understand the terms and conditions of their company car agreement.

By following these steps, you can successfully introduce a salary sacrifice car scheme in your company, paving the way for a greener future and offering a valuable benefit to your employees.

How do They Save Money on Income Tax?

The more you earn, the more tax you pay. But, a salary sacrifice scheme saves you money on your income tax. This is because you pay for the benefit from your pre-tax (gross) salary.

By exchanging part of your salary for an electric vehicle through our business scheme, you save money and protect the environment.

How do They Save Money on National Insurance Contributions?

Employers pay NICs for every salary they give to staff, so any benefits given to an employee are exempt from these payments. This means that if an employer pays for a staff cost, such as a salary sacrifice vehicle, no NICs will be due on the benefit.

Save on income taxes

Benefits Of Electric Vehicle Salary Sacrifice Schemes

Petrol and diesel costs money. With an electric vehicle, you don’t need fuel bills. The only maintenance required is for the brakes and tyres, which you will find on any car anyway. You can find a ton of free charging points. With a plug-in hybrid car, you can travel much further distances whilst still lowering the use of emissions and fossil fuels.

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What Are Salary Sacrifice Schemes?

What happens if an employee leaves?

If an employee leaves then you do not have to continue with payments for the car. However, we will offer the car to the employee under a more standard lease option or to outwardly pay for the vehicle. So, as an employee, you can always have the option of car ownership regardless of if you stay with the company in question or not. Hence, it is a good system to buy a brand new vehicle even if you are worried about the company commitment.






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What Cars Are Available On Salary Sacrifice?

Through Salary Sacrifice you can find a lot of brand new cars for amazing prices. However, you gain the most when choosing ultra low emission vehicles. Providing salary sacrifice schemes for a company car has many benefits, but the option of having new electric vehicles is by far the most impressive.






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What Are The Disadvantages To Salary Sacrifice Cars?

The obvious downside is that you sacrifice part of your salary; however, considering most people now take out financial plans such as leases or loans to cover the cost of cars, none offer the same benefits that this scheme does. Through a salary sacrifice, you can pay less tax, avoid upfront costs, and have access to a range of amazing cars and fully electric vehicles.

For companies, it is a great way to offer a company car, encourage your staff to transition to electric cars, and help you to retain employees.






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Is A Salary Sacrifice Car Scheme Worth It?

If you want a better car that offers tax benefits and avoids any big upfront payments, then this is the best option. It is great for helping you budget and it lowers your income tax. Not many schemes offer benefits such as this.






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Do You Own The Car At The End Of Salary Sacrifice?

You can choose to buy the car once your term is over, however, you also have the option to pass the car back. From there, you can either take on a new salary sacrifice vehicle or move away from the scheme. Have a talk with us today to find out how the specifics work and how you can benefit the most from a Salary Sacrifice scheme.






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