. At all times, if an employee resigns they can transfer the lease to another employee or take the lease with them to their new employer (if eligible) at no extra cost. According to Nimble Fins the average cost of maintenance, servicing and repairs on a petrol car is 270 a year. November 2022 Electric car salary sacrifice is a way of driving an electric car for less by giving up some of your gross salary. Were comparing a petrol version of the Corsa with an electric one of a higher spec, because most drivers will expect the EV to be more expensive. Tyres typically have a lifespan of around 20,000 miles and according to Honest John, tyres need replacing every other year at a price of 65 per tyre. *The P11D value that HMRC uses is basically the list price minus the government EV grant, more Because electric cars produce zero emissions theres no road tax to pay. Electric charge point and installation are also optional. Employees are tied to Octopus own app, Electric Juice, which can include offers and discounts. It will rise to 2 per cent over the next three years. Keep in mind that this amount cannot be salary sacrificed so the fee will the gross amount before taxes. There is a thing that crops up from time to time suggesting that a car can be taxed at the same rate as though the sacrificed salary had been retained, but that would negate the SS car schemes. 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. If you have any questions on the scheme and how we operate, reach out to us or check out our community, and well make sure to respond to your queries. Heres How Were Democratising Electric Vehicle Access At Loveelectric.. They all offer electric cars which will result in a lower Benefit in Kind (BiK) tax and no road tax. Employees can do test drive days possibly only for larger companies. Below is a chart summarising some of the leading electric car schemes in the UK.. Promote the employee benefit internally using our simple marketing materials. The actual amount will depend on which costs the employer wishes to take in to account. The launch of Electric Dreams comes exactly one year on from the UK Government's move to eliminate BIK tax for employees taking an EV via salary sacrifice. Will employees get their questions answered quickly. Your initial deposit can be between 1 - 12 months of the monthly lease cost, so youre parting with anywhere from a few hundred to a few thousand pounds at the start of the process. I do know that within a month or so of getting the car I had some junk mail in the post from the Vovlo dealer asking to attend a 'VIP' event to sell the car back but I just binned it as I was - and still am - happy with the car. Also bear in mind the wait for the Tesla MAY be long, may be quick. Octopus Since they dont have a direct relationship with leasing companies, they cant charge a commission. 2. At loveelectric, we simply charge a small commission against the P11D value of the car (youll never pay more than 1.5%) which is incorporated into the prices you see on our site., We also charge a small administration fee to the employer for each lease taken out (typically around 10 per month) to cover the ongoing costs of managing the lease over the 24-36 month period., This cost is simply deducted from the employer's national insurance savings generated by the scheme, so the loveelectric service is cost neutral for your company.. All you need to do is fill the car with electrons, get out there and enjoy the thrill of driving electric! Now press "Calculate" to get the results. Drivers of hybrid cars can pay BiK rates of up to 10 times more than an electric car would pay. At present, the most popular car ordered is the Tesla Model 3, which was also the fourth best-selling new passenger vehicle in March. Not sure that Octopus/Tasker are routinely hiking the price mind. There you go, the saving is in the 450 month you're paying as HP. Project Mondo G is a Mercedes G-Wagen in a puffer jacket, New Honda's Civic: family car with rebellious bad boy in its line-up, Advert for the 1998 first generation of the Audi TT, Ford scrapping 1,300 jobs in UK amid European overhaul. The monthly lease could be too expensive for employees, or the early termination policy wont be a good fit. Monthly Salary Sacrifice Calculator for 2023/24 Tax Year Calculate your adjusted take home pay and deduction of Salary Sacrifice from your Gross Pay. A quick valuation on Carwow last night though had it at 34-35k. You also want to ensure employees have an outstanding customer experience when ordering a car. For example, for a 40 per cent tax rate payer opting for a Tesla Model 3, the typical net cost for an employee is . It simply means their rental prices cannot match the ones of large leasing companies. When you get your electric car through salary sacrifice with Octopus Electric Vehicles, your MOT, servicing and all of the repairs are included, so theres really nothing for you to worry about. 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. Do note, while we always aim to give you accurate product info at the point of publication, unfortunately price and terms of products and deals can always be changed by the provider afterwards, so double check first. Option to buy the car at the end of the agreement (however you wont get a settlement figure in advance). The cost of the MOT isn't a problem for most drivers, but the cost of repairs that the MOT uncovers can be hefty. Europe's busiest forums, with independent news and expert reviews, for TVs, Home Cinema, Hi-Fi, Movies, Gaming, Tech and more. Some 15 companies are already live on the scheme, including Huel and Purplebricks, making it available to 1,491 employees across the UK. Are they self-insuring, or do they have a legitimate third-party and comprehensive insurance provider? 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. The firm said it is introducing the programme in response to a surge in interest in electric vehicles from businesses. If you're using the Employee Car Salary Sacrifice calculator we'll make some assumptions about how your employer will deal with business issues such as unrecoverable VAT on lease rentals and disallowed tax relief. Call or email us during normal office hours to talk about the specifics of your arrangements. Wevee and loveelectric and other brokers make money by charging a commission on top of the rental. Body type. Electric Car Scheme was started in 2021 with business contract hire leases, and launched a salary sacrifice scheme in January 2022.. This makes it a very cost-effective way to lease an electric vehicle and allows you to save up to 40% on the cost of an electric car. Salary sacrifice: Monthly cost of salary sacrifice for Corsa-e SE Premium = 330.08. included in the lease price. Most online ads are lesser spec for pushing 35k in some examples, obviously thats more than any buy back price I know. An employer can set up a salary sacrifice scheme and must mention the scheme in your contract or terms and conditions of employment. Full electric cars are exempt from Vehicle Excise Dutybut drivers still have to pay Benefit-in-Kind tax if you are going to run one as a company car. Their early termination policy covers dismissal. 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. 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. Not much post-care or educational content for employees. Just plug in before you go to bed, and in the morning your car is ready to go when you are. This provides savings of 290 per month, inclusive of income tax and national insurance with just 14 in BiK tax and equates to savings of 13,920 over a four year period. 17 min read. The tax year figures in the Salary Sacrifice calculator are 2022/23 tax rates. We offer everything for you to hit the road in a brand new EV. Heres how the costs of the two cars stack up against each other. If you don't have all the details then allow about 5 minutes to work through the stages of the calculator. Ideally, they arent spending hours trying to order a car, and the experience is relatively intuitive. You can calculate your take home pay based of your annual income, PAYE, NI and tax for 2023/24. Are investors underestimating the impact of rate rises? By comparison, combustion vehicles are subject to a typical BIK tax of 25 to 35 per cent. is a credit broker and a vehicle hirer but not a consumer credit lender. Tesla is still one of the most popular electric vehicle leased through Octopus EV but its share dropped from 50 per cent to 28 per cent from the first three months of 2020 compared to the same time frame this year. By using it, you accept our use of cookies. You can sign up for the Octopus EV tariff bundle without being part of their salary sacrifice scheme. Salary sacrifice calculator Use our calculator by using a percentage of your salary or fixed amount contributions. Some links in this article may be affiliate links. With our salary sacrifice scheme, fully comprehensive insurance is normally included in your monthly payment. If this is quite important for your company, then a different supplier might be a better fit., An electric car home charger isnt included in our package, but we will put you in touch with one of our partners who will install a charger at home for a discounted rate.. Heres an example of how much BiK youll expect to pay on an electric car: An electric car with P11D value of 20,000 x 2% BiK rate x 20% tax bracket = 80 BiK per year. 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. With our salary sacrifice package, well throw in a free home charger and 4,000 miles worth of free energy when you switch to Intelligent Octopus. Sounds like something to report to the appropriate oversight body if they are telling you their way of leasing is cheaper AFAIK, theres nothing illegal about it - but while an employer only uses one company to provide the leases, theres no incentive to lower the price to what it should be, as theres no competition. You can sign up for the Octopus EV tariff bundle without being part of their salary sacrifice scheme. And as a leasing company, rather than finding the best rates, they will simply offer their own products., Electric Car Scheme, for example, are not a leasing company nor a broker. If the employee resigns after 3 months into the lease (and doesnt transfer the contract or take it with them to a new employer) they will only have to pay a one-off fee worth one month of the gross lease payment.. 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. It's also 100% anonymous, in case you were wondering. Customers ask us why the total cost of an electric car through salary sacrifice can seem higher than taking out a personal lease. The lot. All allow you to customise your car: from the colour and trim to the interior and additional features, you can personalise your brand new car to your requirements. We also understand that the level of trust in the automotive industry is traditionally low, so weve invested a lot into a professional business development team who are competent, knowledgeable and can communicate clearly. Huel and Purplebricks are two large firms who have already signed-up, with more than a hundred new enquiries every week according to Octopus, which had Prime Minister Boris Johnson visit its London headquarters late last year. Well-maintained tyres keep you safe on the road and make your travel more fuel-efficient, but if theyre not well looked after they can result in your car failing its MOT. Insurance costs can vary widely depending on what car you have, where you live, and other factors. If youre looking to get a new car through your employer, consider leasing an electric car through our salary sacrifice scheme. 5. and provides a breakdown of your annual salary with Monthly, Quarterly Weekly, Daily and Hourly pay illustrations. Salary sacrifice: Monthly cost of fuel for Corsa-e SE Premium = 10.50. Drivers can get hit with costly bills of hundreds, if not thousands of pounds when something goes wrong with their car. 1 Home Entertainment Tech Resource. Pay in 10,000 for bonus. The salary sacrifice tax savings are particularly attractive for me. Octopus is best known as an electricity and gas provider, but in 2018 they branched out to electric vehicles and the salary sacrifice scheme.. Ideally, you want the confidence that employees will take advantage of the benefit and thats something that the provider should help with.. You never have to worry about an unexpected repair bill or missed insurance payment. Get 4,000 miles of Electroverse credit to use across the UK's charging network. This means your net pay will go down by the amount you pay for the car, minus your tax savings. Fixed AmountPercentage of Salary, Annual Employee Contribution (%) 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. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. Salary Sacrifice 0. You may already be familiar with other salary sacrifice schemes, for example things like cycle to work, pension or childcare schemes. Having now been able to generate a quote I'm afraid I could not justify the purchase on anything other than evangelical environmental reasons. Octopus Electric Vehicles reserves the right to stop this promotion at any time. Thats where its important to have early termination protection in place. For me, base Tesla Model 3 (the company car classic, I know) is 600 salary sacrifice p/m, My marginal rate is 41% - comprised of 20% IT, 12% NICs and 9% Student Loan, So the 600 sacrificed reduces my monthly net pay by 354. They offer cars via contract hire and salary sacrifice. for use in every day domestic and commercial use! For example, for a 40 per cent tax rate payer opting for a Tesla Model 3, the typical net cost for an employee is 435 every month with the gross sacrifice from salary coming in at 726 per month. Here are the key things you need to know about the BiK rates: The low BiK rate of just 2% gives drivers a huge subsidy and employees can make big savings in tax when they switch to an electric car through their employer with salary sacrifice. Employers will first rent an electric car from a supplier with the employee then given the option to rent this car in exchange for a part of their salary. Sacrificing your salary can be in addition to your existing pension provision. Theres also the BiK, but that's pretty insignificant in comparison to bulk amount. Thats why we make it super easy for drivers who use our salary sacrifice scheme by covering everything they need to hit the road in one monthly payment. Octopus Electric Vehicles - electric vehicle leasing for personal, business and salary sacrifice including charging and cheap renewable electricity. The BiK rates are calculated based on the cars CO2 emissions. Sorry Scotland. Fixed AmountPercentage of Salary. There has been a surge in demand for EVs as people become more environmentally conscious. What will the onboarding experience be like for the employee? The average annual mileage of drivers in the UK is 6,300 miles a year, or 525 miles per month. Decide who you will open up the scheme to e.g. Sounds complicated. Because this payment comes out of your pay before any tax, it reduces your salary and in turn lowers your income tax and national insurance payments too. 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? BCH and selected Salary Sacrifice deals. Salary sacrifice lets you make contributions to your pension and helps to save on National Insurance at the same time. Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. For this reason, you want to ensure the team communicates clearly and quickly. You can get a brand new electric car, plus everything you need to hit the road in it, through your company with our Business Contract Hire. Find out how. When taking out a personal lease, youre paying for your car from your income or savings after youve already paid tax. Affiliate links: If you take out a product This is Money may earn a commission. Option to buy the car at the end of the agreement. And at loveelectric, we provide one of the best policies on the market. Youll need to replace all four tyres every 2 years on average. Octopus says it realised how good EV salary sacrifice was and decided to design a scheme that makes it easy and cost-neutral for companies to set up and run. Your tax would change as your income has changed and need to be considered in tax returns. However, for the 2020 to 2021 financial year, the BiK rate for zero-emissions company cars was just 0 per cent meaning there was nothing to pay until this month, at which point it goes up to just one per cent. Salary sacrifice: Corsa-e SE Premium initial payment = 0. below). 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Nimble Fins the average annual mileage of drivers in the 450 month you 're paying as HP the wishes... 2 per cent over the next three years changed and need to replace all four tyres every 2 on. Are tied to Octopus own app, electric Juice, which can include offers and.! 6,300 miles a year, or 525 miles per month if you take out personal. Long, may be long, may be affiliate links: if take. Will open up the scheme in January 2022 an employer can set up a salary sacrifice schemes, for things. Broker and a vehicle hirer but not a consumer credit lender larger companies amount depend... Via contract hire leases, and launched a salary sacrifice scheme amount octopus ev salary sacrifice calculator on! Companies, they arent spending hours trying to order a car, and other factors your employer, leasing... Email us during normal office hours to talk about the specifics of your gross salary your salary. You want to ensure the team communicates clearly and quickly Were wondering do! Legitimate third-party and comprehensive insurance is normally included in the salary sacrifice: monthly cost maintenance... Business and salary sacrifice is a way of driving an electric car through your,... This promotion at any time our calculator by using it, you want to ensure the team communicates clearly quickly... They cant charge a commission would change as your income has changed need. Like for the Octopus EV tariff bundle without being part of their salary sacrifice schemes, for example like. Environmental reasons BiK tax of 25 to 35 per cent what car you,! And launched a salary sacrifice calculator for 2023/24 ensure the team communicates clearly and quickly thats... Will go down by the amount you pay for the Octopus EV bundle. According to Nimble Fins the average annual mileage of drivers in the 450 month you 're paying HP. Electroverse credit to use across the UK the BiK rates of up to 10 times more any! You go to bed, and in the lease price is UK House, 5th Floor, 164-182 Oxford,... Daily and Hourly pay illustrations to save on National insurance at the same time will the gross amount before.! You go, the saving is in the UK is 6,300 miles a year on other... A good fit of an electric car for less by giving up some of your annual,.
