Jack Cameron
16 December 2024
That got your attention, didn’t it? Well don’t worry, there’s no clickbait here. We have a real solution for employers and business owners. If offering a pay rise isn’t feasible for you, an Electric Vehicle (EV) salary sacrifice scheme could be a game changer. Let us explain:
How does the scheme help me keep hold of my employees?
Retaining employees is one of the toughest challenges facing businesses today, complicated by the 5.8% rise in the average salary and the recent rise in employers’ National Insurance (NI) contributions.
Around 25% of UK companies have admitted they can’t meet this demand for higher salaries. This leaves many businesses struggling to persuade employees to remain. As if that wasn’t enough, replacing an employee can cost around 37.5% of their annual salary on average. The race to retain top talent is certainly becoming an increasingly critical issue.
So, if you can’t afford to offer a straight pay rise, what do you do? That’s where the EV salary sacrifice scheme comes in. While it won’t be the magic solution that keeps your employees in their jobs forever, it’s part of a broader benefits package that any business should have a look at.
With salaries (and therefore tax) on the rise, enrolling in a salary sacrifice scheme becomes ever more attractive to you and your employees.
How does the scheme work again?
An EV salary sacrifice scheme is a way for your employees to pay for a brand-new electric car through their salary before tax and national insurance are deducted. It’s the most efficient, hassle-free and cost-effective way to help your employees make the switch to electric.
Similar to the longstanding “Cycle to Work” scheme, salary sacrifice for electric cars allows you to pay for all costs associated with your car, before you pay tax or National Insurance on that income. This typically saves you 30-60% off the price of your next car. The main difference is you’re not left with the car when someone leaves.
For a more in-depth read on how the scheme works, view our page here!
Is my business eligible for a scheme?
The good news is that there are only a few criteria you need to meet to be eligible for an EV salary sacrifice scheme. As long as your business pays employees through the PAYE system, you can enrol in a scheme. If your business has equity partners who aren’t paid a traditional salary, they can enrol in an adjacent scheme called the Partners’ Car Scheme. This is also useful when employees are promoted from employee and equity partner. They may not make the same level of savings, but it’s still a great incentive.
How do I set up a scheme through my business?
The first step in activating a scheme is getting in contact with our Salary Sacrifice team. From here, we’ll set up a ‘Fact Find’ call to learn more about your situation and how your business is set up. This allows us to tailor the scheme to meet your needs and expectations.
Once you decide to launch a scheme through us, we’ll take it from there. We can assist in making your employees aware of the active scheme, as well as talk them through the benefits in person or digitally. It’s as easy as that!
Is the scheme here to stay?
It may be an amazing opportunity that doesn’t cost you a penny, but it’s still a big step to take, and we understand that. You may still have some questions, many of them relating to the longevity and security of the scheme.
Our current Labour government revealed their commitment to EV tax breaks and support in their recent Budget, so the scheme certainly isn’t going anywhere. The only imminent change would be the rise in employer’s National Insurance contributions. This means that the employer will be saving slightly more through the scheme as the employee’s monthly car payment is deducted before NI.
The only negative would be the 1% rise in BIK tax every year till 2029, but the savings will still be exponential, especially compared to petrol and diesel equivalents.
That’s all great, but why should I choose P+B?
Interested in a scheme but don’t know where to start? Pike + Bambridge is here to guide your business every step of the way. We signed up our first scheme back in 2021, and now support over 100 businesses across the United Kingdom through EV Salary Sacrifice.
As part of our award-winning service, we put your employees first. This enhanced level of service is ideal for those who require a vehicle in a simpler and faster manner. We bring years of expertise in the electric vehicle market, and our dedicated advisors work closely with you to make the entire process smooth, rewarding, and perfectly aligned with your company’s goals.
There are no signup fees or monthly running costs, just a little bit of your time is all we need.
“In the interest of being fully transparent, we reached out to Octopus and Tusker to do a small comparison exercise, however they have not engaged at all (speak volumes if you ask me!) and we very much like the personal aspect that P&B offer.”
– A recent client
Get in touch today to discover how Pike + Bambridge’s EV salary sacrifice scheme can renovate your employee benefits package while making a lasting impact on both your business and the planet!
