Introducing an electric vehicle (EV) salary sacrifice scheme is an increasingly popular way for HR and Benefits Managers to attract and retain talent while lowering their company's carbon footprint.
However, you may find yourself grappling with various concerns as you research the popular green employee benefit:
- Is my company eligible?
- I’ve heard electric cars are expensive: will my teammates and colleagues be able to afford a monthly lease?
- What if an employee leaves the company during the lease term?
- What different EV salary sacrifice options are out there?
With the climate emergency becoming increasingly pressing, businesses and individuals alike are under pressure to act – and switching from a petrol or diesel car to electric is one of the quickest ways to slash your company’s carbon footprint dramatically.
At loveelectric, we're committed to getting as many people behind the wheel of an electric car as possible. To do so, we’re ensuring EVs are more accessible and affordable than ever before.
That’s where EV salary sacrifice comes in.
Simply put, an electric car salary sacrifice scheme allows employees to trade a small portion of their pre-tax salary for an eco-friendly car lease. Not only do electric cars qualify for the incredibly low Benefit in Kind (BiK) rate of just 2%, but the scheme also results in significant tax savings for both the employee and employer.
In short: the financial benefits are massive. Drivers can save between 30-60% on an electric car (though we have seen savings of up to 67% for some of our drivers!).
To ensure that as many employees across the UK benefit from the affordability an electric car salary sacrifice scheme offers, we’ve created this guide to help you choose the best EV salary sacrifice scheme for your company.
In this guide, you’ll find:
- The key factors to consider when choosing the best scheme for your company
- A comprehensive analysis of the EV salary sacrifice marketplace
- A downloadable comparative spreadsheet for the leading EV salary sacrifice schemes (coming soon!).
Ready to find the perfect EV salary sacrifice scheme for your business?
Let’s dive in.
The business case for EV salary sacrifice
When choosing benefits that are advantageous for your business and your employees, few options offer as much value (it’s completely cost-neutral for a start) as an EV salary sacrifice scheme. In a climate where economic stability and sustainability are paramount, adopting an EV scheme can bolster your corporate profile and bring innumerable gains to your team.
If you're on the cusp of deciding whether or not to implement an EV salary sacrifice scheme, it's worth pausing to consider what you want to achieve. Is it primarily about giving your employees a financial leg-up in a challenging economic climate? Or are you seeking to strengthen your corporate commitment to sustainability?
Let’s take a closer look at things you may be considering.
Top of mind for both companies and employees alike is the financial advantages of the scheme. Thankfully, with EV salary sacrifice, the financial advantages for all involved are substantial.
These savings are primarily generated from the lower tax requirement. Both employers and employees stand to save significantly, thanks primarily to the incredibly low Benefit-in-Kind (BiK) rate on EVs, which is currently only 2%. As the employee pays for the lease on their pre-tax salary, they also benefit from reduced income tax – and both they and their employer pay a reduced amount of National Insurance Contributions (NIC).
For employees, these savings amount to a 30-60% saving on the gross monthly lease of the vehicle. Additionally, the cost-effectiveness of choosing an EV is undeniable: electric car drivers benefit from the savings generated by choosing electric over fossil fuels and completely avoid Ultra Low Emission Zone (ULEZ) charges. Plus; insurance, servicing and maintenance is typically included in the monthly cost for most providers, meaning there are no nasty surprises.
In an economic downturn, an EV salary sacrifice scheme can equate to an effective salary increase in the thousands. It's a benefit that serves dual purposes – good for the pocket and the conscience, one might say.
Besides the financial incentives, implementing an EV salary sacrifice scheme is a significant step toward meeting your sustainability and CSR/ESG responsibilities. In the current climate crisis, any step toward reducing carbon emissions is not just a corporate achievement but a global necessity. The commercial pressure on businesses to do their part in mitigating environmental damage is only increasing. Transitioning your fleet to electric vehicles – and encouraging your employees to do the same – can help to reduce your company's carbon footprint dramatically.
Employee satisfaction and retention
A happy employee is a motivated colleague, and an EV salary sacrifice scheme can significantly boost morale and retention. It’s not just about cost savings; it’s about showing you care.
Consider the Ultra Low Emission Zone (ULEZ) fees that your employees may pay in cities across the UK if they drive older, less eco-friendly cars. Implementing an EV salary sacrifice scheme protects your employees' pockets from such extra costs, potentially saving them the need to ask for a pay raise to meet these demands.
An EV salary sacrifice scheme is increasingly becoming a must-have for modern businesses. The benefits are multifaceted, including; tax savings, sustainability goals and employee satisfaction. In the current landscape of the UK’s evolving policies on emissions reduction and a collective drive to mitigate climate change, can your business afford to miss out?
Reduced administration burden
Of course, you could consider setting up an EV salary sacrifice scheme internally on your own. We wouldn’t recommend it though. There’s legal considerations, HR changes, pitching to the board etc. - and that’s all before finding a leasing company or liaising with car dealerships. Do you have the time, energy or expertise to take that on? Just get a suite of specialists to do it all for you - completely free.
Working with an electric car salary sacrifice provider means you just sit back and relax as you watch the benefits roll in – letting you focus on what matters most: growing your business and retaining happy employees.
While these are all tangible business objectives, there's one key reason many of our clients choose to implement our salary sacrifice scheme: recognition. Earning recognition for implementing this innovative initiative which simply works and makes a difference, is a huge confidence boost for many of our clients just like you. Lead the charge in choosing a low-risk, high-reward benefit that offers employees massive savings on their new electric car. Improve company morale. Reduce individual and company carbon emissions. For many, it’s a career milestone.
So, who is an EV salary sacrifice scheme best suited for?
Companies that benefit
The appeal of an EV salary sacrifice scheme isn't limited to a particular business size or industry; it has a broad scope and a myriad of benefits which can be tailored to fit the unique needs of different companies.
Whether you're running an agile SME, a large corporation or an ambitious startup, there's plenty to gain. Here's how.
Traditionally, high-quality employee benefits, such as company car schemes, were the reserve of large corporations. However, the introduction of EV salary sacrifice schemes levels the playing field, enabling SMEs to offer a competitive benefit that aids in attracting and retaining top talent. Operating on tighter budgets, SMEs require flexible benefits that cater to their unique challenges. EV salary sacrifice benefits are not only adaptable in their setup to meet the distinct needs of smaller businesses but also bring the added advantage of the cost-effectiveness of EVs. With reduced running costs and significant tax benefits, SMEs can allocate saved capital towards other strategic endeavours.
For large corporations, the emphasis lies in the scheme's bespoke personalisation: a dedicated accounts team that’s aware of the intricacies of your business requirements. A well-implemented EV salary sacrifice scheme can only be scaled up efficiently when the provider intimately knows the requirements of the business. This then allows to cover a large workforce without any loss of individual benefits. Moreover, adopting such a scheme is a feather in the cap for any corporation's Corporate Social Responsibility (CSR) profile. In an era where companies are evaluated not just on profitability but also on their positive social and environmental impact, an EV scheme perfectly fits a comprehensive CSR strategy.
In the competitive world of startups, attracting top talent can be challenging. Offering an innovative benefit like an EV salary sacrifice scheme can give you an edge when recruiting. Moreover, one of the most attractive aspects of these schemes for startups is there’s no upfront cost. For companies in their infancy - where every penny counts - offering a robust employee benefit without the initial financial burden is incredibly appealing.
An EV salary sacrifice scheme is a versatile solution that offers tailored benefits to different types of companies. From ambitious SMEs who want to go the extra mile for their staff, to the scale-seeking corporations and talent-hungry startups, this employee benefit provides something for everyone. With such a broad range of advantages, there’s little reason for any modern company to forgo this opportunity.
Finding your perfect EV salary sacrifice partner
When choosing and implementing an EV salary sacrifice scheme, the key is finding a balance between the needs for your business and the benefit offered to your team. It's crucial to select a provider that aligns not only with your cost expectations but also your business objectives and the welfare of your employees.
Here are the key aspects you should take into consideration:
- Balanced Early Termination Protection (ETP): All reputable EV salary sacrifice providers will offer ETP - walk away if they don’t! However, policies can wildly differ in the protection level they offer both the business and the employee. Look for a provider offering ETP which is both fair and practical, reducing financial risks for employers and employees alike. Double-check that the monthly lease rates aren’t being inflated to cover the provider’s overhead - inflated lease prices drastically reduce employee take-up.
Read more about our market-leading Flexible Returns Options and Early Termination Protection
- Cost vs value: A cost-effective scheme is essential, but pay attention to value-adds like excellent customer service, post-care for employees and business risk mitigation. A mark of a great supplier is how they react when things go wrong.
- Stock availability and choice: Employees at all salary levels should have options available to them through the scheme and be provided with genuine financial benefits. Look for providers with access to a broad and balanced fleet. Check they regularly offer special offers on both new and used cars.
- Are they specialists, or are they offering a ‘bolt-on’ service? Salary sacrifice is a complex product. Make sure you choose a provider that consists of a team of experts; living and breathing salary sacrifice every day.
- Bandwagon providers: Be wary of providers who simply white label a salary sacrifice service or appear to have only recently joined the salary sacrifice market. As a general rule of thumb: all of the key salary sacrifice providers have been operating since 2021 and will serve a corporate customer base of 1,000+
- Flexible and scalable: Your business isn’t static, so don’t choose a provider that is! The best providers offer cost-effective, adaptable schemes that can scale and adjust to your evolving business needs.
As we take a closer look at the leading EV salary sacrifice providers, we’ll consider how these aspects come into play when organisations decide on the perfect provider for their business.
Who are the leading providers?
Navigating the realm of electric vehicle providers can be overwhelming, with many options available. To save you the hassle of wading through endless information, we've done the hard yards for you and drilled down on some key players in the industry. All companies mentioned serve at least 1,000 corporate customers.
Love your electric car salary sacrifice scheme
At loveelectric, we are committed to ensuring businesses can navigate the electric car landscape with utmost confidence. Our four-step Flexible Returns Options sit at the forefront of our offerings, designed specifically to mitigate risks and bring peace of mind to businesses of all sizes.
Specialising in a bespoke, tailored service for businesses of all sizes, we are committed to making electric cars accessible and affordable for all, working with 350+ dealers across the UK to source the best deals in electric motoring. Our clients gain access to reloved, the original used EV salary sacrifice marketplace, providing additional flexibility and cost-saving options for businesses and drivers alike. We also provide a comprehensive service package that includes insurance, maintenance, breakdown cover, educational webinars, employer materials and dedicated support teams.
Ready to learn more about our offering? Click here to jump to the good stuff.
Drive a better car through salary sacrifice
Tusker has been at the forefront of fleet management for over a decade, offering a diverse range of cars, including electric, combustion and hybrids. With a well-established brand in the marketplace, enterprises often gravitate towards Tusker’s low risk profile.
Get the whole EV package from Octopus
Diversifying from their origins in energy, Octopus EV leapt into the electric vehicle sector in 2018, championing a comprehensive EV solution. Catering predominantly to SMEs, Octopus EV pride themselves on offering an exclusive range of electric cars, paired with their' Electric Juice' app that integrates with their offering.
Electric Car Scheme
Trusted electric car salary sacrifice for employers
Debuting its electric vehicle salary sacrifice scheme in 2022, Electric Car Scheme (ECS) packages a selection of features to entice potential lessees. Offering a variety of lease lengths – from 12 to 48 months – their package encompasses maintenance, MOTs, breakdown cover and tyre replacement. Additionally, they present an optional charger for those seeking an all-inclusive experience.
Case Study 1: The Enterprise - TechInnovate Ltd.
Situation: TechInnovate Ltd. is a large corporate company with over 500 employees. They currently have a salary sacrifice scheme in place with Tusker, but are concerned about the pricing and lead times
Initial leanings: TechInnovate initially signed up with Tusker due to its established reputation and the fact they are tailored for large companies.
The turn: After putting Tusker’s scheme into place, TechInnovate discovered that Tusker’s pricing and lead times leave something to be desired.
Decision: TechInnovate chooses loveelectric, not only for loveelectric’s lower and transparent pricing structure but also for its balance between established reliability and innovative service.
Case Study 2: The Corporate - FinFusion
Situation: FinFusion, a forward-thinking firm of 350 staff, wanted an EV salary sacrifice scheme that streamlined administrative processes and upheld a strong stance on data security.
Initial leanings: Their initial draw was towards Tusker due to its promise of simplicity - a single invoice system and a retention model for employers' NIC. This appeared to reduce paperwork and administrative tasks significantly.
The turn: Upon a deeper dive, FinFusion found loveelectric to be incredibly competitive, especially with its app user experience, early termination flexibility and lead time management. However, while weighing the pros and cons, they leaned slightly towards Tusker's simplified invoicing and perceived financial advantages.
Decision: FinFusion chose to go with Tusker, but it was a closely fought decision. The aspects of ease in operations and slight financial perks were the final sway factors, though they acknowledged loveelectric's strong market position and potential for future collaboration.
Case Study 3: The Specialist - Momentum Finance
Situation: Momentum Finance, a well-established financing company, embarked on a mission to adopt an electric car salary sacrifice scheme. Key decision points for them revolved around risk mitigation, customer service and direct HR support.
Initial leanings: The firm initially leaned towards providers like Octopus due to their market prominence. They were especially intrigued by Octopus's inclusion of chargers in their offering.
The turn: As Momentum Finance delved deeper into the available options, loveelectric began to shine. The firm was drawn to loveelectric's attractive early termination policy, unwavering customer service and the direct support channels provided to HR for issue resolution.
Decision: Weighing all the factors and especially appreciating the value and risk-mitigation loveelectric brought, especially during uncertain situations such as the COVID pandemic, Momentum Finance selected loveelectric as their preferred provider.
Why choose loveelectric?
At the heart of loveelectric is flexibility, a commitment to innovation and a determination to make electric vehicles accessible to every employee nationwide.
That’s why we’ve focused our offering on three key considerations:
- Unrivalled Flexible Returns Options: Safeguarding your company against unexpected charges with uncapped returns.
- No nasty surprises: With us, you're assured of price transparency, no hidden costs and genuine savings on electric vehicles.
- A team you'll love working with: Beyond being a BCorp with an unwavering focus on electric vehicles, our passionate team always goes the extra mile. From sourcing available stock to continuously innovating our services - like introducing the UK's first used EV salary sacrifice marketplace - we're here for you.
The ultimate safety net: Our flexible return options
The most common concern when considering an EV salary sacrifice scheme is the potential risk to your business. As a business leader, you want to offer the best benefits to your employees to maximise their happiness and motivation at work – but this needs to be balanced with the risk to your business.
We’ve honed our industry-leading flexible return options – a four-step safety net designed to mitigate any risk to your business.
- Transfer the lease: If an employee moves to another organisation, the existing lease can be transferred with them, offering a smooth transition.
- Novate to another employee: The lease can be easily transferred to another team member within your organisation; making an EV immediately available to your team and avoiding long lead times.
- Utilise our unique reloved marketplace: If an employee wishes to terminate the lease early, our dedicated marketplace – reloved - offers an efficient exit strategy by making the vehicle available to a huge audience.
If all else fails, our robust, market-leading Early Termination Protection (ETP) serves as a final safeguard, providing complete peace of mind for your organisation.
Critically, we offer uncapped returns under our ETP - ensuring that our clients face no unexpected early termination charges and no nasty surprises.
All reputable EV salary sacrifice providers offer some level of ETP. Here’s how loveelectric’s ETP stacks up against the marketplace.
Transparent, predictable excellence
We’re all in on tackling the climate crisis, and we know you are too. To reach the UK’s ambitious climate goals, we need to work together – which is why we take a partnership approach to all of our relationships.
What does this look like?
We’re seasoned experts in EV salary sacrifice, so we know that a one-size-fits-all approach doesn’t really work for anyone. By immersing ourselves in understanding your company goals, employee demographics and the unique challenges you face, we tailor our scheme to fit your organisational needs perfectly.
Initiating the scheme is just the beginning of our journey together. We stand by you throughout the scheme's lifecycle, offering unwavering support. Be it our comprehensive promotional toolkit, simplified administrative processes, EV Experts on hand to answer questions, or various webinars for your team - you're always equipped with the latest information.
In an industry where trust often runs thin, we’ve consciously built a proficient business development team. We’ve invested in professional business development and account management teams who are competent, knowledgeable and communicate clearly.
We’re all-in on transparency
We recognise that the foundation of any successful partnership is trust. Essential to building this trust is offering clear and transparent prices – prices that will not change the moment you sign the dotted line.
loveelectric and other brokers make money by charging a commission on top of the rental. However, the structure of that commission can often be obscured or purposefully confusing, meaning you don’t get the best deal possible.
Critically, our service will always be cost-neutral for your company.
We charge a modest commission against the P11D value of each car – never any more than 1.5% – which is incorporated into the prices you see on our site. We also charge a small 3% administration fee on each gross lease cost. This fee covers the ongoing costs of managing the rental over the lease period.
The savings generated on National Insurance contributions cover our entire commission, meaning you will never be a penny out of pocket for working with us.
Our commitment to transparent communication extends beyond mere transactions. We keep our partners abreast of the evolving EV market landscape, inform about any regulatory or tax incentive shifts and provide insights on the latest industry best practices.
With loveelectric, you're never in the dark.
A team you'll love working with
At loveelectric, we pride ourselves on being more than just a service provider – we're your partners in driving change.
We are dedicated to meeting rigorous social and environmental standards. Our BCorp (pending) status is a testament to our commitment to using business as a force for good, placing people and the planet alongside profit.
We stand firm in our commitment to a cleaner, greener future. Unlike some competitors, we exclusively offer electric vehicles; you won't find any diesel, petrol or hybrid cars in our lineup. By promoting and supporting electric cars, we're taking measurable steps towards reducing our collective carbon footprint.
reloved: the original used EV salary sacrifice marketplace
Embracing the ethos of sustainability - reloved, our used EV marketplace - gives electric vehicles a second life. Quality-assured, handpicked, used electric vehicles make introducing or expanding your EV salary sacrifice scheme quicker and more flexible than ever before.
The benefits of choosing a reloved car extend beyond the environment, too:
- Lowest cost: Not only are your employees saving 30-60% on their car through salary sacrifice, but they’re also saving £100s more each month by choosing a used car over new. Check out how the savings stack up.
- More accessible: Lower cost = more people can access electric cars, compounding the benefits of the scheme
- Fastest lead times: All reloved cars are available now - eliminating any wait times
Bespoke service tailored to your needs
Specialising in a bespoke, tailored service for businesses of all sizes, we are committed to making electric cars accessible and affordable for all. Working with 350+ dealers across the UK, our dedicated team sources the best deals in electric motoring, ensuring you get unmatched value.
Alongside our uncapped returns and transparent process, we're here to carry the bulk of the benefit’s administrative load, letting you focus on what you do best. With us at the helm, you can effortlessly manage the scheme, reaping its benefits without getting bogged down by its intricacies.
Congratulations on reaching the end of our ultimate guide to EV salary sacrifice schemes! By now, you should understand how the benefit works, the advantages it offers and the key considerations involved.
However, this guide is just that – a guide. It's a robust starting point designed to arm you with essential information, but when it comes to making a decision that could significantly impact your financial and environmental footprint, due diligence is paramount.
To help you in this endeavour, here are some final considerations you should keep in mind:
- Risk mitigation to your business: In today's rapidly changing business landscape, flexibility and risk minimisation are not just buzzwords; they're imperatives. Here at loveelectric, we offer market-leading early termination protection and flexible return options so you can rest easy when things don’t go as planned. This means that you're not locked into long-term commitments without any wiggle room, giving your business the freedom it needs to adapt to unforeseen circumstances.
- Cost to employee: The scheme should also offer financial benefits to your employees. Most salary sacrifice providers will quote you 30-60% off the gross lease price – but the initial price can vary considerably. Make sure you run some comparative quotes, and enquire about their special offers and used car options.
- Business ethics: Opt for a scheme that aligns with your sustainability and ethics goals. loveelectric helps you demonstrate a strong commitment to eco-friendly practices, enhancing your brand's green credentials and reducing your carbon footprint. Plus, with used cars available through our reloved marketplace, we’re doubling down on your opportunity to slash your carbon footprint.
- Ease of use: While many salary sacrifice schemes claim to be cost-neutral, they can often create significant administrative headaches for those managing them. A survey of our clients revealed that 'ease of use' was the second top reason they chose loveelectric over other providers. To avoid drowning in red tape, assess the user-friendliness of a provider's platform and the level of admin required.
love to join? Help your employees benefit from one of the best employee benefit schemes going without it costing you a penny. Drop us an email and we’ll be in touch within 24 hours.
love to halve the cost of your new electric car? You just need your employer to sign up first.
Fill in your company details so we can get in touch - it won’t cost them a penny but it might earn you a few brownie points.