Frequently Asked Questions
Everything you need to know about EV salary sacrifice schemes
What is EV salary sacrifice?
EV salary sacrifice lets employees lease an electric car through their employer. The lease cost is taken from gross salary before Income Tax and National Insurance, so you save 30–60% vs personal leasing. Packages typically include insurance, maintenance, breakdown cover, and often a home charger.
How much can I save?
Savings depend on salary and tax band. Basic rate (20%) taxpayers usually save 30–40%; higher rate (40%) taxpayers 50–60%. Use our calculator to see your exact monthly net cost and savings.
Who is eligible?
Most PAYE employees are eligible if their post‑sacrifice salary stays above National Minimum Wage, and they have sufficient contract length. Directors on PAYE are typically eligible. Self‑employed individuals generally are not.
Does salary sacrifice affect my pension?
Salary sacrifice reduces gross pay, which can reduce pension contributions if they are a percentage of salary. Many employers maintain pension contributions at pre‑sacrifice levels to avoid any reduction. Check your employer’s policy.
What happens if I leave my job?
Common options: (1) Transfer the lease to a new employer (if supported), (2) Early termination fees may apply, or (3) Continue payments personally (losing the tax benefit). Some providers offer protections if an employee leaves—check the provider’s terms.
What’s included in the monthly cost?
Typically: lease, comprehensive insurance, routine maintenance & servicing, breakdown cover, tyres, road tax, and often a home charger with installation. Public charging cards may also be offered.
How does the 2% BiK tax work?
EVs have a 2% Benefit‑in‑Kind rate applied to the car’s P11D value. Example: £40,000 P11D → £800 taxable benefit per year. A 20% taxpayer pays ~£160/yr (£13.33/mo); a 40% taxpayer ~£320/yr (£26.67/mo).
Can I choose any electric car?
Choice depends on provider and employer policy. Most offer a wide range. Popular options include Tesla Model 3/Y, MG4, Kia EV6, Polestar 2, and Hyundai Ioniq 5.
How long does delivery take?
Lead times vary. Factory orders: typically 3–6 months. Stock vehicles: often 4–8 weeks. Popular models may take longer—ask the provider for current lead times.
Can I charge at home?
Yes—most providers include a home charger and installation if you have suitable off‑street parking. The charger often remains yours after the lease ends.
Are there minimum company sizes?
Many providers support all sizes—from sole directors to large enterprises. Some set minimums (e.g., 5–10 employees). Check our provider comparison for details.
What are employer costs?
Most schemes are cost‑neutral or cost‑positive: no upfront fees with many providers and 13.8% Employer NI savings on the sacrificed salary. Some charge small admin fees per vehicle.
What happens at the end of the lease?
Usual options: return and choose a new car, extend the lease, or (sometimes) purchase the vehicle if offered. Vehicles are assessed for fair wear and tear.
Is salary sacrifice better than personal leasing?
For most employees, yes—because payments are taken pre‑tax and NI, and EVs have very low BiK. Personal leasing may suit those who are not eligible for salary sacrifice or want very specific terms.