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WITH PLUG-IN HYBRID and fully electric cars now making up the lion’s share of all new vehicle orders, salary sacrifice schemes are leading the way as the cheapest form of EV funding.
According to Steve Beadle, head of salary sacrifice at Grosvenor Leasing, who are based in Kettering and have been in Northamptonshire for over 40 years, company employees can drive an electric car for up to 40% less with salary sacrifice compared to a personal lease.
And there are advantages for the company too.
Grosvenor Leasing’s offering is risk-free, which is a key factor for businesses that are looking to quickly implement a scheme, as it comes with protection against employees leaving the company, or going on extended sick or maternity/paternity leave.
“Never before have we seen such swift uptake in a funding solution,” says Steve. “The reason is all down to the very low benefit in kind tax (BIK) on electric cars, which has resulted in salary sacrifice becoming by far the cheapest way to source an EV.
“Put simply, if an employee decides to sacrifice a portion of their salary for an electric car, the amount of income tax and National Insurance contributions they pay will reduce.
“Their employer then provides them with a fully funded, maintained and insured electric car, on which they will only be paying very low benefit in kind tax. This provides an immediate saving compared to buying that vehicle or funding it through a personal lease and the employer also gains by making Class 1a NI savings as well as offering an additional staff benefit at no extra cost.
“A unique aspect of our salary sacrifice scheme is that it is also risk-free as it comes with protection against employees leaving the company, or going on extended sick or maternity/paternity leave.
“This is a particularly important feature of our offering because it means companies can implement it with complete peace of mind.
“It’s also very straightforward to put in place and with minimal input or administration it can be implemented swiftly – quickly becoming a very important staff benefit offering sizeable savings.”
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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 MG MG4 Hatchback 125kW SE EV 51kWh 5dr Auto on a 3 year lease, covering 10,000 miles a year would save £151.83 per month.
- A 40% tax payer choosing a Cupra Born Electric Hatchback 150kW V2 58kWh 5dr Auto covering 10,000 miles a year over 3 years would save £201.62 per month.
- A 40% tax payer choosing a Tesla Model Y Hatchback Long Range AWD 5dr Auto with 10,000 miles a year over 3 years would save £351.64 per month.
www.thegrosvenorgroup.co.uk/salary-sacrifice | T: 01536 536 536 | E: