Benefits of an EV Salary Sacrifice Scheme
- Thursday, August 10, 2023
- Posted By The Growth Company
Electric cars are in demand, with a new EV registered every minute in July 2023. It’s a sustainable and cheaper-to-run alternative to petrol cars and with the UK Government phasing out the sales of new petrol and diesel cars by 2030, it’s a change we will all need to embrace sooner or later.
With more models entering the market and more charging stations being installed across the UK, there’s never been a better time for businesses and individuals to embrace electric vehicles. However, the initial outlay for EVs remains quite high and many individuals who would like an EV see it as quite a pricey option, especially in the current cost-of-living crisis.
To help break this barrier, many employers are choosing to run salary sacrifice schemes which allow their employees to lease EVs through their company. Under these schemes, employees save money as the charge comes out of their pre-tax salary.
More than half of UK businesses already offer their employees a sacrifice scheme for electric vehicles and as the technology becomes more and more commonplace, it’s something your business should think about too.
Here are some ways implementing a salary sacrifice scheme for electric vehicles will benefit your business:
Employee benefits make your team feel valued and appreciated. A strong benefits package encourages your people to stick around, as 75% of employees say they’re more likely to stay in a job because of the benefits package. Finding benefits that add value to their life is important, as some perks are often seen as trivial and have no real value.
The opportunity to drive a brand-new EV for a lower price is an incredibly useful benefit and something highly desirable for many. Plus, many electric vehicle salary sacrifice schemes include maintenance, insurance and a home charger installation, so your employees can benefit from completely hassle-free driving. Salary sacrifices make driving an EV affordable for many when it otherwise might not be.
It isn’t just your employees that seek benefits, it’s a way of attracting more talent to your organisation. Candidates always consider employees' benefits when applying for a role or when choosing one to accept an offer. 78% of people are more likely to apply for and accept a job if there are details of benefits in the ad. And of the numerous options for employee benefits, “help to get a car” ranks in the top five for most job seekers. It all comes down to employer branding and how your company is perceived both internally and externally.
Having useful benefits like an EV Salary Sacrifice Scheme enhances the employer brand and makes you seem generous, conscientious and shows you take care of your employees.
Many job seekers are also looking for companies that share their values, and passion for the environment and tackling climate change is a value that many won’t ignore. By showing your commitment to EVs you’re also demonstrating you care for the planet (more on that later) and are serious about the environment. This could help your employer brand stand out against competitors for potential talent.
As we just mentioned sustainability is becoming more important to talent and existing employees, but also to customers, board members and stakeholders. We’re all aware of the effects of climate change and it’s becoming more important that businesses announce their action plans. Businesses now need to launch climate action statements and show that they’re changing habits to reduce their c02 emissions, and as we all know, actions speak much louder than words.
Of course, transport plays a huge role in this regardless of your industry; whether that’s commuters or transporting goods or services.
As electric cars are better for the environment than petrol and diesel vehicles, your business’s commitment to putting them on the road shows your seriousness about meeting sustainability goals.
While it’s not going to solve everything and you still need to look at reducing emissions in other parts of your business, a salary sacrifice scheme is a great way of showing your staff, customers, prospective employees and stakeholders that you’re taking action to lower your emissions and trying to create change.
Helping employees embrace a low-carbon commute will have a huge impact on your sustainability goals. Transport accounts for around one-fifth of global carbon dioxide (CO2) emissions and road travel accounts for three-quarters of transport emissions. When we think about the drive to work, this makes up a lot of our individual travel and should be addressed to reduce both business and individual carbon footprints.
Of course, travelling via public transport or active travel is the most sustainable way to travel, especially with Greater Manchester’s new low-carbon Bee Network. But in many instances, this isn’t always possible. For businesses in more rural areas or business parks outside of towns, providing low-cost access to EVs is the easiest way to ensure your employees can travel sustainably.
An EV salary sacrifice scheme will save your business money and employees money. From a business perspective, it’s free to join and for each employee who joins the scheme, you’ll pay less employer National Insurance.
As well as this, your people will save money on their taxes as the payments for their new electric car will be taken from their pre-tax salary. As a result, your employees will be able to save up to 40% on the complete electric vehicle package (new car, charger, insurance, breakdown, and more). They’ll get a top-of-the-range car at an affordable price and be ahead of the curve when demand inevitably surges for electric vehicles after 2030.
As Electric Vehicles are still a new and daunting technology for many of us, it’s understandable that a lot of employees are scared of committing to buying one outright. There are still a lot of questions that come with the EV like; how easy will it be to charge while on the move? Will I save money? Will it feel the same as driving a petrol car? So giving employees a chance to try an EV at a reduced rate should be a tempting offer.
Not only will they be able to access a top-of-the-range car for cheaper but employees will be able to get to grips with new technologies and learn about the benefits of EVs first-hand. If they’re converted they may end up as advocates for the tech and convert friends and family to electric vehicles too.
To learn more about the Salary Sacrifice schemes on the market right now, visit our electric vehicle campaign page.