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21 May 2024

How an electric car salary sacrifice scheme can be good for everyone

Green benefits can help both an organisation’s environmental, social and governance (ESG) strategy and boost its duty of care at the same time

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More and more employees believe their employer has a social responsibility towards them, not just in the workplace but increasingly outside it as well.

While it’s accepted that employee wellbeing increases productivity and employee retention rates, it is also important outside the workplace too.

Employee wellbeing benefits continue to increase and range from financial wellbeing programmes to healthy living and exercise plans, and mental health awareness and mindfulness courses, all of which are proving popular for both employees and employers.

There is also one area in which employee wellbeing, and by extension the employer’s duty of care can sometimes be overlooked – commuting and travel.

While salary sacrifice season ticket schemes for train travel aren’t particularly new to benefits, they’ve increasingly been appreciated for their environmental credentials and for the ability to contribute towards employees’ financial wellbeing.

Demand for sustainable travel

With 50% of the UK’s working population commuting to and from work by car, employee benefits that help them travel sustainably are increasingly desirable.

The introduction of the Health and Safety at Work Act 1974 meant employers had to take appropriate steps to ensure the health and safety of their employees when they are driving or at work, whether this is in a company or hired vehicle, or in the employee’s own vehicle.

This becomes trickier to manage when employees use their own vehicles for company travel, as the employer has less oversight of the age, condition and insurance status of their cars.

An easy, cost effective and incentivising solution to a benefits scheme is the introduction of a salary sacrifice car benefit programme.

Beneficial all round

These schemes offer employees access to highly affordable, low emission vehicles which, due to the way salary sacrifice is structured, are beneficial for not just the driver, but for employers’ duty of care responsibilities as well.

For most employees, after housing, a vehicle will be their biggest cost, so organisations that can offer their employees access to affordable cars, especially electric vehicles, report a huge increase in the ability to attract and retain talent.

Not only will this provide new, and therefore safe vehicles for employees to drive, but crucially, the scheme’s insurance includes both commuting and business use, so whatever happens on the road, the employee will always be appropriately insured.

Salary sacrifice car schemes make the most savings with electric and ultra low emissions vehicles due to the low benefit-in-kind tax bands for such vehicles, and schemes can be set up to only include electric vehicles or vehicles within a certain CO2 emissions bracket.

The environmental benefits are immediately obvious, with tailpipe emissions falling as drivers move away from more polluting petrol and diesel cars.

New cars for everyone

The best schemes can also offset any tailpipe emissions using verified offsetting schemes – even EV drivers can benefit from this, as some providers offset each electric car on the worst-case assumption that every EV being charged is with non-green tariffs.

As a result, it is not just higher earners that are able to enjoy new cars. They are affordable for basic rate taxpayers too, which is not always possible through more traditional company car schemes.

With salary sacrifice car benefits schemes, more employees can be rewarded and incentivised than ever before.

Research from provider Tusker shows most new EV or low emission car drivers on salary sacrifice schemes are coming from vehicles more than seven years old and so are often giving up a more polluting car.

If you are looking to increase your company benefits provision and boost your ESG credentials at the same time, Tusker’s expert team can talk you through the process of achieving both goals at once.

In partnership with Tusker

Market leaders in salary sacrifice car schemes with more than 15 years’ experience.

Contact us today