Electric vehicles (EVs) are becoming increasingly popular in the UK, as more and more are choosing to ditch petrol and diesel cars in favour of a more environmentally friendly option. In fact, according to a recent article in Forbes, the battery electric vehicles (BEV) market is growing while the market for pure fossil-fuel vehicles has collapsed and in this past month, the amount of EVs purchased increased by 73% compared to this month last year.
Along with this new interest in EVs, a new way of accessing them has emerged - leasing cars through salary sacrifice. Compared to a traditional PCP finance deal, leasing can dramatically decrease the price while simultaneously providing the flexibility of being able to upgrade your car sooner compared to a traditional contract.
You may think that that sounds amazing for the individual leasing the vehicle, but how could it be beneficial for the employer? This post will share the key reasons why an EV salary sacrifice scheme could benefit you, your company and your employees!
Key Reasons:
1. Boosts employee morale
2. Encourages employee retention
3. Helps meet company sustainability targets
4. Useful tool during the recruitment process
5. Saving on employer National Insurance Contributions
6. Breakdown, maintenance, servicing and early termination is covered
7. Access to premium cars at an affordable price
8. It’s completely free to sign up
1. It can boost employee morale
One of main reasons for taking part in a salary sacrifice scheme is the impact it can have on your employees. Improving company morale will often lead to having a positive workplace which in turn can lead to your employees becoming more engaged and feeling more connected with their company. This sense of teamwork and loyalty tends to lead to higher productivity, better business performance and higher profits.
Boosting your employee benefit package doesn’t have to cost a bomb, and signing up to loveelectric is completely free! So, why not make your workplace have a great company culture, where your employees want to stay and help grow your business!
2. It can increase employee retention
Boosting morale is also another way of increasing employee retention. Retaining your talented staff can be tricky, so signing up for an EV salary sacrifice scheme can be a useful tool to ensure employees feel valued and incentivised to remain at your company. EV salary sacrifice schemes are relatively new, so you can really stand out from the crowd by offering such an amazing benefit. Having a perk such as access to a wide range of EVs at affordable prices may just be the ticket to retaining your staff! Let’s not forget that EV salary sacrifice schemes make paychecks go further - for example, if an employee was saving £250 per month on the cost of an EV through the scheme, it’s actually equivalent to a £5000 annual pay rise!
We all know employee turnover isn’t just inconvenient, it can also be very expensive, so doing all you can to ensure employee satisfaction can be a highly cost-effective solution, as it pertains to incentivising your employees to remain loyal to the company.
3. Helps meet company sustainability targets
Being a more environmentally conscious company not only benefits other people and the planet, it also looks great from a CSR perspective! More and more people are aligning themselves with solutions that will protect our future world and both employees and customers alike are becoming quicker to judge businesses who aren’t adapting to greener solutions. So why not be part of the solution as well as a leader in your industry?
You may have heard that the UK government is both aiming for net zero emissions, as well as banning the sale of internal combustion engines (ICE) by 2030. Given the movement towards the more environmentally sustainable options, being an early adapter to this movement may be very beneficial for the future.
Additionally, if you live around the London area, you’ll already be aware that the city has congestion charges for internal combustion engine (ICE) cars. These charges start at a minimum of 15 pounds a day and it looks like more cities will follow their lead and introduce similar charges, Edinburgh being one of them. It’s clear to see that a lot of the relevant governing authorities are moving towards a greener future, so there has never been a better time to make sure your employees don’t get stung with new taxes aimed at ICE car owners.
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4. It’s a recruitment incentive
Having the ability to offer a great hiring incentive, such as the possibility to get a premium EV for a fraction of the typical cost, could play a major role in your recruitment process, potentially placing your company above others. Being able to offer a benefit such as access to a dream car might just clinch that outstanding potential employee. loveelectric offers an affordable, comprehensive plan where employees have access to a diverse variety of EVs on the market, ranging from Nissan Leafs to Porsche Taycans.
Another aspect to consider is that it may also be an advantageous benefit to include in the recruitment process itself. If this benefit was included in your job advertisements, or if it was included on your careers page, it’s highly likely to boost the attractiveness of your company to potential employees.
5. It will save money
A key reason to join a salary sacrifice scheme is that it’s also a great (HMRC approved) way to save money on employer national insurance contributions (NIC). In the UK, employers have to pay 13.8% NIC on their employees’ wages, but through a salary sacrifice they end up paying less, as the portion of money that is being paid towards the salary sacrifice effectively lowers the employee’s salary and therefore, there is less tax to be paid on it. Read more about it here.
Additionally, if you often find yourself reimbursing your employees for the cost of their fuel when on business trips, you may be very interested to know about yet another way you can save money. HMRC allows businesses to pay staff 45p per mile for internal combustion engine (ICE) cars, but it's only 4p per mile for electric cars. So, this means that if an employee drove 10,000 business miles in a year, this would save the employer £4,100 on the cost of travel for that employee.
6. Breakdown, maintenance and servicing is covered
When you’re signed up with loveelectric, every lease will include breakdown cover, servicing, maintenance as well as an early termination protection. So you can feel secure in the knowledge that the cars are fully protected and well looked after.
What happens if my employee chooses to leave?
Not to worry! At loveelectric, we offer an early termination protection as standard. If one of your employees chooses to end the lease prior to the contract, there are a couple of different solutions. If possible, the lease contract can be transferred to another employee. If that’s not an option, the lease contract could be transferred to the new employer.
If neither of these options work, that’s not a problem, as loveelectric will ensure that the employer is protected from any potential early termination charges. loveelectric, will ask the employee to pay an administration charge of one month’s rental (which can be processed via their salary). Ts&Cs do apply, so feel free to at hello@loveelectric.cars if you want to know more.
7. No cost to sign up
At loveelectric, signing up to the scheme is completely free! You don’t have to pay any fees to sign up, there are no minimum obligations and you won’t have to pay any fees if you don’t use the service (however, we’ll do our best to ensure there’s a car available that suits you!). Why not sign up and see how much you could save?
8. Signing up is simple
Now you might be wondering, how much admin is involved? We have made the process as easy and straight-forward as possible. You begin by sending us a signed application (which you’ll receive when you enquire via our site), which will only take 5-10 minutes and is all done online.
After that, we’ll send a final supplier agreement for you to e-sign and you’ll then get login details to our webapp for yourself and your employees, where you can browse cars and get live up to date quotes. At this stage, you’ll be able to select what kind of EV you’d like! Once your employees have selected a car and lease agreement, you’ll just need to click a button to approve it. It’s that simple!
FAQ’s
Is salary sacrifice HMRC and VAT compliant?
Although this leasing deal may seem too good to be true, it is real! Salary sacrifice schemes are HMRC and VAT compliant. If you want to find out more we recommend reading up more about it here and if you have any additional questions, please feel free to contact us at hello@loveelectric.cars and we’ll do our best to help.
How can I find out if I’m eligible?
The general guideline of the type of businesses we work with are businesses that are profitable and have been trading for at least 2 years, however we do make exceptions! The best way to find out if you’re eligible for our salary sacrifice scheme is to contact us and we’ll be able to see whether or not loveelectric is a good fit for your business.
Click here to fill out a simple form, and we can double check if you’re eligible to join the lovelelectric family.
Is this scheme only for company use or can I use the car for personal use?
The vehicles leased though lovelectric can be used for both business and personal use, so whether you just want to use your car to commute to work or if you have plans on the weekends, you’ll be able to use your loveelectric vehicle. Click here to see what kinds of EVs we have available!
Last Updated: 13 June 2022
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