Salary sacrifice EV schemes could aid return to work, says Fleet Evolution
Salary sacrifice EV schemes could help entice reluctant workers back to the office, following the Government’s easing of Covid restrictions on so-called ‘Freedom Day’ today (19 July).
So says EV leasing and fleet management specialist Fleet Evolution, which believes that higher transport costs and the continued risk of infection may make many employees averse to returning to full-time office working.
A recent study by online payslip provider PayDashboard revealed that the return to work would financially impact workers; on average, they’ve saved £100 per week on their commute by working from home. And another survey by the firm of 2,000 employees found 40% said they would look for another job if their employer did not make home-working available.
While some employees have turned to buying used cars to source their own independent means of commuting, resulting in used car prices at near-record highs, this has duty of care implications for many businesses, as the ‘grey fleet’ vehicles involved are typically are older and more poorly maintained than traditional company-provided vehicles.
But Andrew Leech, managing director at Fleet Evolution, said the introduction of a salary sacrifice scheme with an emphasis on electric vehicles could provide a more effective solution.
Key benefits of salary sacrifice include potentially significant cost savings for an employee compared to buying their own car. Typically, all maintenance, road tax, business insurance and breakdown cover costs are included within the monthly cost, which is deducted from the employee’s gross salary. This saves on income tax and National Insurance Contributions.
While Benefit-in-Kind tax is payable on the car provided, if employees select EVs with zero emissions they benefit from a tax rate of just 1% in the current tax year.
And employers see monthly savings in NIC and VAT, as well providing employees with clean, fully maintained vehicles which helps manage their grey fleet risk.
“We are currently seeing that 97% of our forward orders through our salary sacrifice car schemes are battery electric or plug-in electric hybrids. Customers are realising the benefits of offering employees, who would not normally qualify under the company car scheme, access to low-cost, low-emission EVs.”
Not only do employees save on acquisition costs under salary sacrifice, but running costs are also significantly cheaper with an EV.
“Our figures show that an electric car which travels 10,000 miles a year has transport costs of under £20 per month,” Leech outlined.
“And to show how cost-effective EVs can be, a customer at automotive components manufacturer Unipres was able to travel 31,000 miles at just £320 per annum in electricity charges, which is a huge saving over conventional motoring costs,” he said.
“For employees who may be feeling under financial pressure, and who also may not want to risk public transport when they return to work, a salary sacrifice electric car scheme could be the prefect answer,” he added.