Vehicle available for Leasing from Fleetsauce in Wrexham

Electric vehicle salary sacrifice - the cheapest way to drive an EV

Electric vehicle salary sacrifice - the cheapest way to drive an EV

(Posted on 08/12/21)

As COP26 draws to a close companies are looking at ways to help reduce their carbon footprint.

Employees opting for diesel models have seen their monthly tax bills rise as benefit-in-Kind tax is now linked to the amount of CO2 a vehicle produces.

This has led to an increase in demand for electric vehicles. Companies are now seeing more employees requesting electric vehicles as company cars. 

With low tax, 1% for 2021/22, and 2% for 2022/23 on battery/electric cars, they are the perfect company car.

More companies are now offering salary sacrifice schemes as part of a benefits package.

BVRLA Chief Executive, Gerry Keaney said: “The resilience of the leasing sector is creating greater levels of confidence within the industry, giving us many reasons to be optimistic going into 2022. Despite ongoing difficulties sourcing new vehicles, members have still been able to make progress in electrifying their fleets to improve the sector’s sustainability credentials.”


You may already use a salary sacrifice scheme. A company pension scheme, gym membership, or childcare vouchers, are all salary sacrifice. It’s also a cost-effective way to own an electric car.

The British Vehicle Rental and Leasing Association (BVRLA) says battery electric vehicles (BEV) and plug-in hybrids (PHEV) contributed to more than a third of new orders over the last year.

It is forecast that one in four cars on fleets will be either BEV or PHEV by Q2 2022.


You pay for the perk from your gross salary before your employer deducts income tax or National Insurance (NI) contributions. 

This means your employer will base tax and NI on the lower salary amount.

With an electric car scheme, your employee will lease the vehicle from a leasing company such as Fleetsauce.

Our new salary sacrifice quoting system is in its final stages and will be available to customers very soon!

You then lease the vehicle from your employer using your gross salary to pay a fixed monthly amount. The car remains the employer’s responsibility and the employee pays tax, but not NIC, on the “taxable benefit”.

There will be no up-front costs. Some employees will also include insurance and maintenance too. 

Your employer will also benefit.  They will pay reduced NI each month as they will be paying employees based on the lower salary amount. 

The Association of Fleet Professionals (AFO) said: “Low taxes on EVs are powering a very high level of interest in company cars, including from people who have previously taken cash options, as well creating momentum behind EV-based salary sacrifice schemes, which meet the needs of many employees.”


If you want a brand-new electric vehicle, a salary sacrifice scheme is the cheapest way to drive one.

As your employer leases the vehicle, you do not own it. At the end of the contract, you decide whether to hand it back and take out a new lease. In some schemes, there is the option to buy the vehicle at the end of the contract.


Would you like to talk about how this can work for you and your employees? We have a dedicated team who can advise on salary sacrifice schemes for electric cars.

CLICK HERE to start a conversation.


Contact us for a FREE consultation on salary sacrifice schemes for your company.



Call 0800 0321 433

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