Electric Vehicle Salary Sacrifice: A Solution for Local SMEs
Electric cars aren’t just for big firms or early adopters anymore. More small businesses across the UK are turning to electric vehicle salary sacrifice schemes to offer practical perks without driving up costs.
For local SMEs, this approach makes it easier to support staff, save on tax, and do something positive for the environment all in one go. Keep reading to find out how it works and what makes it such a strong option.
What Is an EV Salary Sacrifice Scheme?
An EV salary sacrifice scheme allows an employee to lease an electric car using part of their gross salary. That amount comes off their pay before tax is applied. As a result, they pay less Income Tax and National Insurance, which makes the cost of driving a new electric vehicle much more manageable.
The employer also saves money, thanks to lower National Insurance contributions. Plus, most schemes bundle everything together, including servicing, road tax, insurance, and breakdown cover, into one monthly payment. That means no hidden extras and fewer decisions for your team to worry about.
Why It Works for Local Businesses
For small businesses, offering valuable perks without stretching the budget can be tricky. EV salary sacrifice changes that. You can provide a real benefit that staff want without increasing your overheads.
What’s more, it’s easy to put in place. With minimal admin and no need to own or manage a fleet, you can offer your team access to premium vehicles. EZOO’s electric car salary sacrifice scheme is one option built with flexibility in mind, giving employees a choice of electric vehicles and a fully managed setup.
Big Savings and Low Risk
Since April 2022, the Benefit-in-Kind (BiK) rate for fully electric cars has been 2%, and it will stay at that level until April 2025. After that, it will rise by 1% each year, reaching 3% in 2025/26, 4% in 2026/27, and 5% in 2027/28. That low rate means employees, particularly higher earners, can save up to 60% on the total cost of leasing an EV through salary sacrifice.
Employers benefit too. Every vehicle taken through the scheme lowers your National Insurance bill. And if someone leaves, many providers offer early-exit cover or protection options, helping to reduce the financial risk to your business.
Supporting Your Sustainability Goals
More SMEs are under pressure to show progress on environmental targets. Offering electric cars through salary sacrifice is a simple, visible step towards reducing your company’s carbon footprint. It’s also appealing for potential hires. Staff are increasingly looking for employers whose values match their own and greener travel options are high on that list.
Making the Switch Simple
Getting started with an EV salary sacrifice scheme isn’t complicated. Most providers handle the details, from working out salary deductions to delivering the cars. With everything managed in one place, it frees up time and headspace for business owners and HR teams.
You don’t need to commit to long-term contracts either. Many providers offer flexible terms, so you can adapt the scheme as your team grows or circumstances change.
A Smarter Way to Offer Benefits
An electric vehicle salary sacrifice scheme gives your team a benefit they’ll genuinely use while helping you cut costs and lower emissions. It’s simple to set up, cost-effective to run, and adds real value without stretching your budget or increasing admin.
