EV Salary Sacrifice for Small Businesses: SME Guide

EV Salary Sacrifice for SMEs

Small and medium-sized businesses can offer EV salary sacrifice schemes just like large corporations. Here's everything you need to know.

Why SMEs Should Consider It

• Employee Attraction: Competitive benefit that costs the business nothing
• Retention Tool: Employees commit for 2-4 years
• Sustainability Goals: Demonstrate environmental commitment
• Employer NI Savings: You save 13.8% on the sacrificed amount

Minimum Company Sizes

Different providers have different minimums:

• The Electric Car Scheme: 1 employee (even sole directors)
• Octopus EV: 5 employees
• Loveelectric: 10 employees
• Tusker: 50+ employees

Cost to the Business

The scheme is cost-neutral or even cost-positive:

• No upfront cost to set up with most providers
• Employer NI savings: 13.8% of the salary sacrifice amount
• Administrative burden: Minimal with modern providers

Implementation Steps

1. Choose a Provider: Compare based on your company size
2. Legal Review: Review salary sacrifice agreements
3. Employee Communication: Provider typically assists
4. Payroll Integration: Simple monthly deduction
5. Launch: Employees can start ordering

Considerations for SMEs

• Pension Impact: Salary sacrifice reduces pensionable salary
• Minimum Wage: Ensure employees stay above minimum wage
• Mortgage Applications: Can affect lending calculations
• Exit Management: Clear policy for leavers needed