Salary Sacrifice or Company Car?
What’s the difference between salary sacrifice schemes and a company car?
While both result in an employee receiving a car via their employer, a company car and salary sacrifice scheme have several key differences.
A company car is owned, leased, or subscribed via the company itself, and isn’t paid for by the employee. If owned by the business, a company car is treated as a fixed asset, which can have several tax implications such as depreciation. A company car is often offered to senior employees or those who spend a lot of time commuting or travelling between locations.
With a salary sacrifice, all permanent employees are offered the chance to opt into the scheme if they would like an alternative, affordable method to driving an electric car. It also means the value of the car is treated as taxable due to BIK (benefit in kind). The BIK rate will be as low as 2% until at least the 24/25 tax year, making a salary sacrifice electric car a massive cost-saving benefit.
What are the benefits of getting an electric car through salary sacrifice?
There are plenty of benefits to setting up an electric car salary sacrifice scheme, both for the employer and the employee.
Benefits for employers include:
- Attract and retain the best talent your industry has to offer
- Improve the environmental impact of your workforce
- Enjoy the total convenience with elmo managing all payroll and HMRC admin
- Avoid the risk and cost of early termination
- Pay nothing extra – elmo’s fee for running the scheme is equal to the employer’s NI savings
Benefits for the employees include:
- An all-inclusive package that includes insurance, vehicle excise duty, MOT, service, breakdown and more
- Save as much as 60% on the cost of an electric car subscription
- Choose from the largest range of subscription electric cars on the market
- Enjoy total flexibility by avoiding multi-year leases
- Upgrade or change your EV whenever you like
These benefits are all on top of the fantastic benefits experienced by electric car drivers, including attractive savings on fuel costs, congestion charges, and more.