2. You to a panel of third-party lenders or hirers and in such circumstances may receive a At home charger and installation is included in the lease cost. Our salary sacrifice monthly payments include absolutely everything you need to hit the road: car, charger, insurance, servicing, maintenance, breakdown and tyres. If you don't have off-street parking or a driveway, we'll give you 4,000 miles of free public charging credit with Electroverse. Use our EV salary sacrifice calculator below to find out how much you could save each month. Take advantage of our salary scheme through your employer. Option to buy the car at the end of the agreement. Ideally, they arent spending hours trying to order a car, and the experience is relatively intuitive. 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.. 1. Car leasing is the same as a long term rental. Salary Sacrifice can be either a fixed figure or percentage of gross pay. You can save up to 40% on the cost of a brand-new electric car when you use our salary sacrifice scheme. 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. Feb 16, 2023. For other cars no. Early termination only covers 10% of claims or ten cars whichever is greatest. For example, you might choose to pay for a Tesla Model 3 RWD, with a range of 254 miles and a P11D value of 43,490.On a 48-month business contract using one of the providers above, and driving 8,000 miles a year, you could save just over 20,000 paying via EV salary sacrifice, compared to buying the vehicle outright. By comparison, combustion vehicles are subject to a typical BIK tax of 25 to 35 per cent. Salary sacrifice: Monthly cost of insurance for Corsa-e SE Premium = 0. But before you start our electric car salary sacrifice calculator, here's an explanation of what the calculator does and also the information you'll need to hand to get the most out of it. 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. You can calculate results based on either a fixed cash value or a certain proportion of your salary. Octopus Electric Vehicles Limited is authorised and regulated by the Financial Conduct Check out the video below to find out more. How electric car salary sacrifice plans work, How to implement an electric car salary sacrifice plan, How to participate in an electric car salary sacrifice plan, unrecoverable VAT on lease rentals and disallowed tax relief, the adjustment to pay required under Car Salary Sacrifice, the difference in tax, NIC and pension scheme contributions between 'cash' pay and Car Salary Sacrifice, the net pay and net delivered value of the employee's pay packet before and after Car Salary Sacrifice, employer's national insurance contributions, the employer's total cost of Car Salary Sacrifice before and after tax relief/recovered VAT, A monthly contract hire quote for the car the employee wants, including maintenance and breakdown recovery, Your business's tax rate and VAT recovery rate, A decision on whether or not you will reclaim unrecoverable VAT on contract hire rentals from the employee, If the car is not electric, whether or not you will reclaim unrecoverable business tax relief on lease rentals from the employee, Your monthly pay and your tax code - a copy of your last payslip should have the details, A monthly business contract hire quote for the car you want, including maintenance and breakdown recovery. This means that battery electric car drivers now pay 2% in BiK - still a fraction of the amount of tax drivers of petrol, diesel and hybrid cars pay. However, there are a couple of things to keep in mind when working with us: We dont offer combustion cars or access to cars via Personal Contract Purchase, personal leases or business hire. 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. Tesla Model 3's are the most popular car to get through Octopus' salary sacrifice scheme. Feb 24, 2023. They offer a StopGap car while you wait for your new car. You wont know if your company is eligible until you apply. Salary sacrifice: Monthly cost of fuel for Corsa-e SE Premium = 10.50. Note: Looking to get started with a salary sacrifice scheme that has no hidden cost and offers the best early termination policies? What will the onboarding experience be like for the employee? *The P11D value that HMRC uses is basically the list price minus the government EV grant, more You get taxed a small amount for the benefit of having the car, whilst making other savings on Income Tax and National Insurance. Below is a chart summarising some of the leading electric car schemes in the UK.. For context: -Mid 30s, father of 2 -Salary roughly 95k The average annual mileage of drivers in the UK is 6,300 miles a year, or 525 miles per month. The company saves 53.19 on National Insurance meaning it is cost neutral for them. BiK has historically been very low for electric cars to encourage the uptake of low emissions vehicles as the UK moves towards decarbonising transport. They all offer electric cars which will result in a lower Benefit in Kind (BiK) tax and no road tax. Electric car scheme customers will have to pay double rent for the first six or 12 months. If you take the same car through salary sacrifice, the 80 annual BiK tax would be split across your monthly payments, working out at just 6.67 per month. New to Salary Sacrifice? Love Electric Financial Services Limited is authorised and regulated by the Financial Conduct Authority; firm reference number 743264. 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. Octopus has been providing salary sacrifice for the last year but only as a broker for other leasing companies. Help your employees benefit from one of the best employee benefit schemes going without it costing you a penny. These contributions are taken from your salary before tax and National Insurance are paid, so are tax efficient. Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. Whos Electric Car Scheme good for? Thanks to certain tax advantages, it means you can drive an electric car for less money than if you were to lease one out of your taxed salary. Inside Octopus EV podcast . But really, it's not. Because our electric car salary sacrifice is one all-inclusive price that covers everything you need to hit the road, this comparison gives drivers savings of nearly 70 per month while letting them switch to a brand new, top-spec electric car. Car insurance costs fall 55 on average in just three months New higher price cap comes into force today and households How to get the cheapest car insurance: Ten tips for cheaper car cover, See Prince Philip's Land Rover that sold for record amount, Dacia's new Jogger estate transforms interior space into a bedroom. The tax year figures in the Salary Sacrifice calculator are 2022/23 tax rates. Their early termination policy covers dismissal. So far, 141 companies have signed up to salary sacrifice with Octopus, making it available to 22,298 employees. When you lease a new car, youll usually make an initial payment at the start of the contract. 33,600.the Jaguar i-Pace EV400 at 65,195 or the Nissan Leaf Acenta at 30,445. 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.. Salary sacrifice: Monthly cost of tyres for Corsa-e SE Premium = 0. The No. 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. For example, make sure to ask what the providers partners are. Were about to show you how you can get your hands on an electric car that will cost you less each month than a petrol car. We often link to other websites, but we can't be responsible for their content. A good level of cover will typically include roadside assistance; home recovery; national recovery; parts and repairs; and onward travel. Its a financial commitment that needs time and money to manage. Lets take a comparison of the cost of leasing a Corsa 1.2 SE Edition petrol car vs taking a Corsa-e SE Premium through salary sacrifice. for use in every day domestic and commercial use! HMRC treats the benefit separately from your salary, which means you pay the tax before it arrives into your bank account. A dealer etc will arrange this for you. Before getting into the specifics of each scheme, note that most of the five electric vehicle salary sacrifice car schemes include the following: Since were the ones who are writing this article, we thought we would start with ourselves. commission. Get the Tesla Model 3 Long Range AWD Auto on a Personal or Business Lease, from as little as 471.99, and with FREE UK delivery. For this reason, you want to ensure the team communicates clearly and quickly. Sacrificing your salary can be in addition to your existing pension provision. Perhaps a concrete example would make this clearer. 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. Volvo assume 400 insurance, 150 tax, 300 tyres, 300 servicing. There are no investment guarantees and you can end up with less than you put in via investments. Body type. Monthly Salary Sacrifice Calculator for 2023/24 Tax Year Calculate your adjusted take home pay and deduction of Salary Sacrifice from your Gross Pay. There is usually an option on how to add this on your return, but HMRC are experts on this. The Employer Car Salary Sacrifice calculator estimates all of the items in the Employee calculator plus: employer's national insurance contributions employer's pension scheme contributions VAT recovery and business tax relief the employer's total cost of Car Salary Sacrifice before and after tax relief/recovered VAT The 2% rate is fixed until April 2025 at 2%, and then will increase by 1% each year until 2028. But if you know these details you can make the calculation more accurate by starting with the Employer profile rather than start as an Employee. Or ten cars whichever is greatest than you put in via investments six or 12.. Pay the tax before it arrives into your bank account 300 tyres 300! 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