Sustainability

Is an EV Salary Sacrifice scheme right for your business?

As businesses and individuals alike aim to reduce their carbon footprint, the demand for electric vehicles (EVs) continues to surge. However, the cost and logistics of switching to EVs can be daunting for many. That's where solutions like an EV Salary Sacrifice scheme come into play.

What is an EV Salary Sacrifice scheme?

An EV Salary Sacrifice car scheme is a perk that you, as an employer, can provide to your employees. It's a flexible and low -cost method of providing your employees tax-efficient access to new EVs, without the financial commitment or up-front costs of outright purchase.

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You set up a scheme with a provider (like Alphabet)

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Qualifying employees visit a dedicated website, compare options and optional extras and submit for approval

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After approval, you (as the employer) deduct a certain amount from their salary, before NI and income tax, each month

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They pay a Benefit-in-Kind (BIK) tax though their salary, based on the vehicle CO₂ emissions and their respective income tax brackets

Find out more about how a Salary sacrifice scheme works

Why are EVs a popular choice for Salary Sacrifice schemes?

A Salary Sacrifice scheme gives your employees the incentive to switch from a traditional petrol or diesel engine to a cleaner electric vehicle.

Enhanced company reputation

Your Salary Sacrifice scheme could be just the thing to encourage your employees to make the switch to electric. As the world moves towards a more sustainable future, it can only benefit your business to be seen as a greener, more responsible employer.

More bang for your drivers’ bucks

Electric vehicles can have higher list prices, however, both employers and employees can reap the rewards of savings over the contract lifecycle. Due to savings in Income Tax and National Insurance (through reduced gross pay before tax) employees could save as much as 50% on monthly payments by accessing the vehicle via a Salary Sacrifice scheme vs a Personal Contract Hire. For employers meanwhile, reduced NI contributions (as well as not havin

Charging Convenience

With home and workplace charging options available, your employees also have the access to the public charging network. A growing on-the-go charging network and useful apps (to show where the nearest chargepoint it) mean your employees are able to plan their journeys to give them peace of mind.

Lower VED, BiK tax, and maintenance costs

VED and BiK tax rates are based on tailpipe CO₂ emissions, with EVs paying the lowest rate. Since EVs also tend to have lower maintenance and fuel costs, drivers and businesses could save thousands of pounds over the life of their vehicles’ contract by choosing an EV over a petrol or diesel vehicle.

What to consider from a company fleet perspective

There are plenty of pros for both company and employees when it comes to EV Salary Sacrifice schemes, but it’s important to consider the practicalities too.

A Salary Sacrifice car scheme can be a powerful incentive for hiring and retention of your employees, so you’ll need to decide if you want to choose to open the scheme up to all employees, or only to certain levels or job roles. Be conscious that employees at lower salary bands may not be suitable for the scheme, since it could theoretically cause their take-home salary to fall below the legal national minimum wage.

Some drivers might prefer to stick with petrol or diesel vehicles (especially if they’re used to travelling long distances and wary of an EVs charging range). A survey or informal discussion can help gauge interest in advance and plan for whether or not it’s worthwhile setting up a scheme.

Your employees’ EVs will need charging, so check that public chargepoints are available nearby, and consider whether (if take-up is likely to be high) it’s worth installing workplace chargepoints. You can find out about grants available for workplace and domestic chargepoints in our guidance.

Identify and mitigate any financial risks such as the potential costs of early termination of the lease due to long-term sick leave, redundancy, or a decrease in salary. Collaboration with your supplier to cover such risks is essential.

Consider how the salary sacrifice scheme will integrate with any existing benefits schemes. For instance, it could complement a traditional company car scheme.

Effective communication is key. Ensure that eligible employees understand the scheme, how it works, and the potential benefits it could bring to them.

How Alphabet can get your scheme moving

Whether you're weighing up the pros and cons of an EV Salary Sacrifice scheme or have already decided to make the move and are scoping out suppliers, we’re here to help.

Stress-free setup and management

Our expert team will guide you through the process, ensuring the implementation is seamless and simple, and your drivers can view quotes and request orders directly through our dedicated website, keeping your admin to a minimum!

Comprehensive packages

All our Salary Sacrifice scheme vehicles come with MOTs, servicing, maintenance, repairs and breakdown cover included.

Wide range of the EV makes and models

We offer a wide range of vehicles suitable for all your employees' needs. We'll help your employees choose the right vehicle to suit their lifestyle and meet the emission standards for the scheme.

Costs and emissions analysis

With Alphabet's expert consulting, you'll gain a clear understanding of the potential savings and the environmental benefits that an EV Salary Sacrifice scheme can bring to your business.

Talk to our experts

Got questions? We’ve got answers

Get in touch with our expert team to find out how we could get your EV Salary Sacrifice scheme up and running in no time.

Sustainability

Is an EV Salary Sacrifice scheme right for your business?

What is an EV Salary Sacrifice scheme?

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