Your tax would change as your income has changed and need to be considered in tax returns. The move instantly made an EV financially much better than a petrol or diesel equivalent, leaving drivers with savings on income tax and national insurance. Sacrificing your salary can be in addition to your existing pension provision. You can calculate your take home pay based of your annual income, PAYE, NI and tax for 2023/24. The scheme, called Electric Dreams, uses a system known as 'salary sacrifice' which allows staff to pay for a new electric vehicle out of their gross salary, potentially saving them thousands of pounds on national insurance and income tax. For example, make sure to ask what the providers partners are. Contact us at hello@loveelectric.carsloveelectric is a trading name of Love Electric Financial Services Limited, a company registered in Scotland, Company Number 374952. Make. loveelectric was founded when our CEO, Steve, wanted an electric car and realised that purchasing one was out of budget. Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. An employer can set up a salary sacrifice scheme and must mention the scheme in your contract or terms and conditions of employment. It's also 100% anonymous, in case you were wondering. When taking out a personal lease, youre paying for your car from your income or savings after youve already paid tax. 2. Employees will pay a fixed monthly cost for the vehicle whichis made using their gross salary which is their income before tax or net salary plus their national insurance and income tax. The BiK rates range from 2% for zero and low emissions vehicles, all the way up to 37% for cars that create more pollution, The BiK rate for electric cars has increased from 1% to 2% from 6th April 2022, and is currently fixed until April 2025, From April 2025, the BiK rate will increase by 1% every year until 2028, Your income tax bracket (e.g. You wont know if your company is eligible until you apply. You may also find the following Finance calculators useful. The sacrifice the employee makes out of gross salary is 726 which, after tax, is equivalent to paying 435. Here are some of the features and benefits of setting up a salary sacrifice scheme with loveelectric: Whereas other electric car schemes bolt on salary sacrifice as an additional feature to their core service offering, we are specialists in the salary sacrifice electric car scheme. Don't forget, as with any investment, that it can fall as well as rise. Fixed AmountPercentage of Salary, Annual Employee Contribution (%) Insurance is an essential part of keeping your car on the road. Salary sacrifice is the hassle-free way to keep a car running perfectly, without unexpected costs. Bear in mind your saving is, this: Assume 500pcm for the Tesla (NET) Fuel cost PA Volvo about 1500 (61mpg on 15k, though probably more) Fuel Cost Tesla (assume 10p rate) at 3.8KWH/mile about 400 PA. Then car tax, insurance, servicing etc. Limited access. We are no longer accepting comments on this article. Our salary sacrifice car scheme offers a number of tax and personal benefits savings for the employee who pays for their electric vehicle from their gross salary before tax. Salary sacrifice: Monthly cost of MOT, maintenance, servicing and repairs for Corsa-e SE Premium = 0. Fiona Howarth, chief executive of Octopus Electric Vehicles, said: 'Salary sacrifice makes electric cars a no brainer making them significantly cheaper than their petrol or diesel counterparts. They all offer electric cars which will result in a lower Benefit in Kind (BiK) tax and no road tax. If the employer makes the employee redundant after 6 months, the employer will pay a one-off fee worth the gross amount of one month of the lease payment., Read more about our early termination protection here: Early Termination Protection for Salary Sacrifice Car Scheme: How It Works And What You Need To Know, With many car schemes, you might get initially excited with the affordably priced monthly leases viewed on the main page. Love Electric Financial Services Limited is authorised and regulated by the Financial Conduct Authority; firm reference number 743264. Your salary does not change overall. Check out the video below to find out more. On average UK drivers can expect to pay around 484 per year, according to Nimble Fins. Powered by Xenforo, Hosted by Nimbus Hosting, Original design Critical Media Ltd. For context: -Mid 30s, father of 2 -Salary roughly 95k Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. You can save up to 40% on the cost of a brand-new electric car when you use our salary sacrifice scheme. So, if, in 3 years, you pay it off, keep it, it's going to running it as the only outgoing and, a depreciating asset. That's the group's vision and the website goes on to explain more about that goal. Shortest delivery time. Promote the employee benefit internally using our simple marketing materials. Personal lease: Monthly cost of breakdown cover for Corsa 1.2 SE Edition = 14.08With our salary sacrifice package, breakdown is included at no extra cost, so you dont need to worry about getting your own roadside assistance. Select a specific online salary sacrifice calculator from the list below to calculate your annual gross salary (after salary sacrifice adjustment) and net take home pay after deductions. Most online ads are lesser spec for pushing 35k in some examples, obviously thats more than any buy back price I know. Retain the same pension contribution, so your take-home pay goes up, Add the savings to your pension pot so it grows for your retirement. Read this guide to Salary Sacrifice and How Salary Sacrifice can reduce the amount of tax you pay. They offer a StopGap car while you wait for your new car. BCH and selected Salary Sacrifice deals. Electric Car Scheme was started in 2021 with business contract hire leases, and launched a salary sacrifice scheme in January 2022.. When you lease a car youll put down an upfront deposit, make monthly payments and then either return the car to the leasing company at the end of the contract, or you might have the option to buy the car at the end of the lease. Note: Looking to get started with a salary sacrifice scheme that has no hidden cost and offers the best early termination policies? Fro example, I was getting through a set of good tyres every year (front at least). 1150 PA. Use our quote tool to see what we can offer you and your team. No standing. Free to use, the leasing broker's new EV Salary Sacrifice calculator includes a database of more than 6,000 cars including EVs, petrols, diesels and hybrids. The cost of the MOT isnt a problem for most drivers, but the cost of repairs that the MOT uncovers can be hefty. By using it, you accept our use of cookies. Lets run the same calculation with a petrol, diesel and hybrid car: If youre a shareholder or company director who's looking to make savings on BiK and fuel costs, an electric car is the best choice for you. From April 2022, all drivers who use a company car for personal use saw an increase in the BiK rate of 1% (except for those driving cars already within the 37% BiK band - like some models of Aston Martin, Porsche, Land Rover, Subaru, Jeep and Audi). . Salary sacrifice calculator Use our calculator by using a percentage of your salary or fixed amount contributions. We've pre-filled some sample data. or less. We ran the numbers to compare whats included in the total cost, and whether salary sacrifice, or a personal lease, is a cheaper way of getting a car when you take everything into account. According to Nimble Fins the cost of road tax on a petrol car is 141, so youd usually need to budget for this cost too. The firm said it is introducing the programme in response to a surge in interest in electric vehicles from businesses. The numbers are based on a 40-year-old driver who earns 40,000, lives in South London and drives 8,000 miles a year. For this reason, you want to ensure the team communicates clearly and quickly. Registered office and trading address: 101 Rose Street South Lane, Edinburgh, EH2 3JG. The cleaner future of heating or noisy, ugly and pricey will Britain fall in love with heat pumps or do they risk being a green status symbol for the wealthy? Again, if you don't have all the car details then just accept the suggested finance and maintenance values that appear in our Car Salary Sacrifice calculator and use your own insurance premium as a starter. Find out how. When we take into account the costs of fuel, insurance, tyres, MOT, servicing and repairs on top of the basic lease price for a personal lease, we can see that getting hold of an electric car equivalent through salary sacrifice works out cheaper. Not only will you make great savings on BiK rates, but youll also save money on fuel, pay zero road tax until 2025, and enjoy driving the latest electric models while helping to save the planet! Electric Dreams aims to support the growing number of employees looking to go electric using salary sacrifice which could ultimately help them save thousands of pounds on both national insurance and income tax. As we mentioned above, each salary sacrifice monthly lease will be different and include different services. Wales. Octopus may introduce Employers and employees who want everything bundled together and include a charging solution and home energy tarriff. Body type. Call or email us during normal office hours to talk about the specifics of your arrangements. Help your employees benefit from one of the best employee benefit schemes going without it costing you a penny. This does not affect our editorial independence. Employees can access both combustion and electric cars. It is simple to follow and shows how you can benefit from doing this. Perhaps a concrete example would make this clearer. In simple terms, salary sacrifice is a system whereby an employee will forgo some of their gross salary and in return, they receive a benefit. Youll need to replace all four tyres every 2 years on average. This is Money takes a look at Octopus Electric Vehicles' new programme and explains exactly how salary sacrifice schemes work. Ideally, you want the confidence that employees will take advantage of the benefit and thats something that the provider should help with.. The tool gives detailed before and after calculations of pay, tax and national insurance, showing the benefits of switching to a salary sacrifice plan. Speak with our expert team to discuss your EV needs, order your car and we'll deliver to you as soon as it's available. Octopus said many drivers are saving 30 to 40 per cent and some up to 60 per cent. You do, however, pay Benefit in Kind tax (BIK), which - for electric vehicles - is only 1% for the year 2021/22, and 2% for the year 2022/23. Personal lease: Monthly cost of lease for Corsa 1.2 SE Edition = 190.04. For a better experience, please enable JavaScript in your browser before proceeding. According to the Nimble Fins research, the average petrol car driver in the UK spends around 1,272 a year on fuel to get from A to B, at a cost of around 20.1p per mile. As with any investment, that it can fall as well as.. 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