Electric vehicles lead the way in car salary sacrifice schemes
The option of offering a car salary sacrifice scheme as an employee benefit has been available for several years, but increasingly, more employers are looking at adopting them.
The British Vehicle Rental and Leasing Association’s (BVRLA) Leasing Outlook, January 2024, reveals that the number of vehicles leased through a salary sacrifice arrangement has seen a year-on-year increase of 68% from Q3 2022 to Q3 2023. Rapid growth in this area is expected to continue, with the BVRLA attributing this trend to cash allowance drivers switching to these schemes once their current car financing arrangements end.
Employees are choosing electric
However, further reasons for this growth can be seen in the fuel type of the vehicles that employees are choosing under the salary sacrifice arrangement. The BVRLA’s figures highlight employees are selecting:
- Petrol – 9%
- Diesel – 1%
- BEV (battery electric vehicle) – 77%
- PHEV (plug-in hybrid electric vehicle) – 12%
- HEV (hybrid electric vehicle) – 1%
As REBA's product guide to electric vehicle salary sacrifice schemes demonstrates, the reasons for offering an electric vehicle (EV) salary sacrifice scheme are numerous. From the environmental and carbon reducing advantages, through to the stability of set Benefit in Kind tax levels until 2027/28 and the cost savings that both employees and employers can make as a result of the salary sacrifice, this benefit could play a pivotal role in your total reward package.
REBA’s product guide aims to provide facts, tips and insights into implementing an EV salary sacrifice scheme and to help you select the right solution for your organisation. Including information about salary sacrifice arrangements and the tax considerations, this product guide will help you to ask suppliers the right questions when procuring this sought-after benefit.
