Are there any costs to the employer to set up a salary sacrifice scheme?

Yes, there are initial set-up costs, but most employers would agree the scheme is extremely cost-effective and more than covers the initial outlay. Incurred costs may include consultation with benefit consultants, legal or financial advice and payroll and administration system implementation.

Is salary sacrificing a car lease worth it?

Absolutely. The key is to discuss the most suitable lease terms and vehicle with the employee to make sure they will make full use of the agreement without incurring additional costs due to exceeding the mileage allowance or incorrect maintenance.

What is the difference between a company car scheme and salary sacrifice?

Both company car schemes and salary sacrifice car schemes are employee benefit programs, but they differ in their cost to the employee, ownership, structure and tax implications. It is advisable to research and compare options available before deciding on which scheme is better to offer as an employee benefit.

What is the main benefit of a salary sacrifice scheme?

The main benefit of the company car salary sacrifice scheme is the tax savings it offers to both employees and employers over the lifetime of the lease. Talk to one of our professionals about the precise calculations and see how much you could save over the lease period.

How does a salary sacrifice scheme save employees money?

Salary sacrifice enables employees to cover the cost of their lease from their gross income (before tax) instead of their net pay. As a result, they benefit from reduced income tax and National Insurance contributions, potentially saving thousands of pounds annually.

What happens if the employee leaves the company?

More and more people are looking to drive electric cars to help with environmental impact as well as benefit from the cheaper running costs involved. At Gatweay2Lease we have a vast selection of hybrid as well as fully electric cars available for personal lease and we would be happy to discuss your options in terms of accessing a personal lease electric car, so get in touch today.

Does a salary sacrifice scheme class as a personal or business lease?

Salary sacrifice schemes are classified as company cars, which means they are considered Business Contract Hires (BCH).

Is salary sacrifice a taxable benefit?

Yes, in the UK specific tax arrangements were introduced in the Finance Act of 2009. Most salary sacrifice benefits such as childcare vouchers, pension contributions and car leases are subject to income tax and national insurance contributions based on the value of the benefit received. Known as ‘benefit in kind’ (BIK) taxation.

What happens at the end of a salary sacrifice scheme?

Depending on the terms and conditions set out at the commencement of the lease agreement there may be a few options. As the agreement period has come to an end the employee had the option to return the vehicle to the company without any further obligations. They may also have the option to purchase the vehicle for a predetermined price relative to its current value or they may renew the scheme with a fresh lease and a brand-new vehicle.

Salary Sacrifice for Electric Cars

The rising cost of living is impacting many, including employers, and employees are increasingly looking to their employers for support. This is where salary sacrifice car schemes can play a significant role in your benefits strategy. These schemes help attract and retain top talent while allowing employees to save 30-60% on an electric car, making environmentally friendly vehicles more accessible and affordable.

Enquire today Learn more about salary sacrifice

What is a salary sacrifice car scheme?

Salary sacrifice is an arrangement between employers and employees where an employee 'sacrifices' a portion of their gross salary in exchange for non-taxable benefits such as retirement savings, childcare support, bicycles, or, in this case, an electric car lease.

This setup not only reduces the employee's income tax and national insurance contributions but also provides significant savings. Through salary sacrifice, employees can save between £5,000 to £15,000 on the cost of their car, making it a highly attractive and cost-effective benefit. This scheme not only benefits employees financially but also promotes environmentally friendly commuting options, aligning with sustainability goals and enhancing the overall benefits package offered by employers.

How does an electric car salary sacrifice scheme work?

EV salary sacrifice allows you to save between 30-60% on any electric car of your choice. By agreeing to have a portion of your pre-tax salary deducted each month to cover the car cost, you can significantly reduce your expenses. Simply choose the car you want, add any extras, and drive away while saving thousands of pounds.

The employer arranges a lease for an electric car on behalf of their employee.

Employees receive the car as a benefit, with the employer providing it in exchange for the employee's agreement to maintain the vehicle and allocate a portion of their gross salary to pay for it.

The sacrificed salary is tax-free, resulting in significant savings amounting to thousands of pounds. Employees reduce the cost of the lease by paying from their salary before taxes are deducted.

A car leased through a salary sacrifice scheme qualifies as an employee benefit and is categorised as a "company car." Consequently, a small Benefit-in-Kind (BiK) tax is applicable, calculated based on three factors: the car's CO2 emissions level, its P11D value (on-the-road price), and the employee's personal tax bracket.

Gateway2Lease’s EV Salary Sacrifice Scheme

Given the growing popularity of electric car salary sacrifice in the market, we have partnered with one of the UK’s leading salary sacrifice schemes, The Electric Car Scheme to offer our clients the ability to access this popular employee benefit.

Although it is possible to use salary sacrifice to lease any car in the market, using this scheme to lease an electric car allows you to maximise savings. This is because electric cars produce zero tail-pipe emissions, which means they are subject to lower BIK tax (2% currently). The BIK tax for conventional petrol and diesel cars can be as high as 37%.

Put simply, through salary sacrifice, you can save between 30-60% on a new electric car, compared to a personal lease!

About the Electric Car Scheme

Save 30-60% on any electric car through salary sacrifice

With the Electric Car Scheme, you will receive the best prices on electric cars available in the market, unrivalled protection against unexpected costs, and a trusted 5* service that goes above and beyond your expectations.

Complete Risk Protection

Best Prices Available

Trusted 5-Star Service

No Setup or Running Costs

All-Inclusive Offering

Wide Range of EV's

Want to learn more about The Electric Car Scheme? Complete the enquiry form below and get your team on their personal journeys to Net Zero.

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What are the benefits of leasing a car using the salary sacrifice scheme?

Employer benefits of a salary sacrifice car lease

A valuable staff benefit that can help you attract and keep the best employees.
Employees traveling in well-maintained and fully insured vehicles reduce the risk associated with 'grey fleet' and provide both safety for your team and peace of mind for you.
Eco-friendly options will reflect well on your company and reduce additional costs such as congestion charges.
Employers will not need to offer consumer credit to their employees on these schemes.

Employee benefits of a salary sacrifice car lease

Drive a new vehicle without a large initial payment.
Full maintenance, breakdown cover and road tax included.
Insurance cover provided by the employer.
Save on income tax and national insurance.
Flexible contract terms to suit your requirements.
A wide range of cars to choose from.
No credit checks on your file.

salary sacrifice car leasing scheme benefits

Leasing electric cars through salary sacrifice

The popularity of electric vehicles has been growing rapidly and the recent high costs and shortages in petrol and diesel have made them even more attractive. A vehicle you can fill up overnight at home, more eco-friendly and with lower running costs. What’s not to like?

This is why our electric car lease salary sacrifice scheme offers a great range of electric vehicles that come with even further benefits to both employer and employee including a demonstration of eco-friendly practices by the company, lower running costs, additional tax incentives, access to clean air zones, future-proofing and enhanced employee well-being.