Make the switch to electric cars: Unlocking benefits with salary sacrifice
Currently, the introduction of new environmental regulations makes the transition from petrol and diesel to electric cars highly relevant. People are now able to travel further in electric cars and charging points are more frequent because of evolving technology. Switching to an electric car would enable everyone to make a significant impact in lowering their carbon footprint.
In recent years, there has been an increasing number of electric vehicles now available because of market growth and regulatory support. The UK government initially aimed to be a climate leader by banning new petrol and diesel cars by 2030. However, in September, Rishi Sunak delayed this ban to 2035 (a goal that is in line with the EU).
So is now the time to transition from petrol to electric? This guide covers the current market status, technological improvements, and government incentives and tax advantages available.
So is now the time to transition from petrol to electric?
This guide covers the current market status, technological improvements, and government incentives and tax advantages available.
This image is sourced from CarWow
How electric car salary sacrifice works
The government’s tax incentives for electric cars promote sustainable choices. They can help support the cost of purchase or save money when installing a home charger.
However, these incentives can be complex and difficult to access, which is where The Electric Car Scheme can help. We aim to make the switch easy for employees to access these incentives whilst saving money on electric cars.
The difference between salary sacrifice and standard leasing:
To help drivers access better savings on the journey to net zero, the UK government introduced electric car salary sacrifice. This is an employee benefit where a company leases an electric car for its employees. In return, the employee agrees to deduct a portion of their salary to pay for the lease.
On a typical personal lease, the employee would pay for the car with their net salary (salary after tax). Instead, salary sacrifice allows employees to subtract this amount from their gross salary (before tax), so they can save more money.
Benefit in kind tax (BIK)
Benefit in Kind is tax applied by HMRC to cars given to employees for personal use. This is also known as Company Car Tax.
The following factors determine how much BIK tax you pay:
The cars list price
P11D value
CO2 emissions,
Fuel type,
Personal tax rate
We understand that this can seem complicated. The Electric Car Scheme we aim to simplify your the electric car experience, making it hassle-free.
Why get an electric car now?
Electric cars are more technologically advanced than ever before, especially the battery life and ultra-rapid charging infrastructures. Consumers now have more choices to meet their needs and preferences, from small city cars to family SUVs.
Battery technology
Battery technology has improved over the years and is more efficient with a larger capacity. This means longer driving ranges and faster charging times. Gone are the days of range anxiety, as most EVs now have a minimum battery range of 250 miles.
Charging network expansion
Charging infrastructure has grown significantly in recent years. At the end of September 2023, there were 49,882 electric vehicle charging points across the UK. That is a 43% increase compared to September 2022 (according to ZapMap).
In 2019, ZapMap discovered that there were more electric charging points than petrol stations in the UK. There more opportunities to charge your EV than ever before!
Home charging solutions
Installing a home charger has become more common because they are now more affordable and accessible. This means drivers can charge their cars overnight and wake up every morning with a full battery to start the day.
At The Electric Car Scheme, we have partnered with Smart Home Charge to simplify the electric car experience. You can get full tax savings on maintenance, breakdown cover, comprehensive car insurance, and a home charger.
This image is sourced from Startup Daily
Autonomous features
Much like petrol and diesel cars, driver-assistance systems and autonomous driving features are advancing. These systems have seen improvements in accuracy, safety and functionality in 2023 alone.
Factors to consider when making the switch
The cost of running an electric car
A common misconception about electric cars is that they are very expensive. When considering the total cost of ownership, electric cars are cheaper than petrol or diesel alternatives. Plus, salary sacrifice schemes (like ours at The Electric Car Scheme) can save you 30-60% on the cost!
Note: Pricing shown is based on data collected from The Electric Car Scheme quote tool. All final pricing is inclusive of VAT. All prices above are based on the following lease terms; 10,000 miles pa, 36 months, 40% tax rate payer and are inclusive of Maintenance and Breakdown Cover.
Use the EV salary sacrifice calculator to see how much you could save on an electric car with salary sacrifice
Charging infrastructure
Before getting an electric car, think about how many charging stations are nearby or along your usual routes. If you can charge your car at home, you'll have the most convenient and cost-effective way to use your EV.
Your driving habits
Picking a range to suit your driving needs is essential when you’re looking to make the switch to electric. Charging speeds and ranges are constantly improving but you do need to take your habits into consideration.
You can make a positive change towards net zero by switching to an electric car, and what better time than now?
Electric car salary sacrifice allows you to save 30-60% on any electric car of your choice. You simply agree to have a portion of your pre-tax salary deducted each month to cover the car cost. The Electric Car Scheme can help you choose the car you want and drive away saving thousands of pounds.
Learn more about The Electric Car Scheme here.
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