Check out this guide that explains why companies choose our salary sacrifice scheme. 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. Who is Octopus EV good for? As you can see, our electric car salary sacrifice scheme really does cover everything you need to hit the road. Ready to find out whats so special about our EV salary sacrifice scheme? Drivers of hybrid cars can pay BiK rates of up to 10 times more than an electric car would pay. If youre taking out a lease on a petrol or diesel car, youll be paying much more in fuel costs than you would if you were leasing an electric car. Always remember anyone can post on the MSE forums, so it can be very different from our opinion. Contact us at hello@loveelectric.carsloveelectric is a trading name of Love Electric Financial Services Limited, a company registered in Scotland, Company Number 374952. We've pre-filled some sample data. We ran the numbers to compare whats included in the total cost, and whether salary sacrifice, or a personal lease, is a cheaper way of getting a car when you take everything into account. They are a lot smaller than traditional leasing companies, owning 10,000 vehicles compared to large ones that might have over 350,000 cars., By being smaller, itll mean they cant negotiate discounts with manufacturers and since they arent owned by a retail bank, their cost of capital will be a lot higher. For a better experience, please enable JavaScript in your browser before proceeding. Sign a simple contract to sign up to our free service. 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. Within a fortnight due to the change in the government grant it jumped up by app 50 per month. Fixed AmountPercentage of Salary, Annual Employee Contribution (%) For me the clincher was just how all inclusive it was. They offer cars via contract hire and salary sacrifice. Volvo assume 400 insurance, 150 tax, 300 tyres, 300 servicing. How are you going to help us activate employees? Personal lease: Corsa 1.2 SE Edition initial payment = 389.03 (equivalent to 1 month lease + broker fee of 198.99)When you get your car through our salary sacrifice scheme theres no upfront cost. There are already many similar cycle to work schemes in place where workplaces provide their employees with bikes to get to and from their office. The lot. You may already be familiar with other salary sacrifice schemes, for example things like cycle to work, pension or childcare schemes. It also assumes the employer wishes to reflect any net savings they made in National Insurance by reducing the gross sacrifice so an adjustment of 10 per cent has been made. * Please note that these can be expressed as a cash amount or percentage of your salary, Annual Employer Contribution (%) They offer a StopGap car while you wait for your new car. 'If just 10 per cent of UK's employees switched to electric we could decimate CO2 emissions of cars, while collectively saving almost 4billion per year. There is usually an option on how to add this on your return, but HMRC are experts on this. Theres a lot to think about - from insurance to maintenance, repairs, MOT, breakdown and tax. You are using an out of date browser. 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. With salary sacrifice for an electric car, as an employee you're not taxed on the salary you give up. The salary sacrifice tax savings are particularly attractive for me. Click on the appropriate button below to get your Car Salary Sacrifice calculation started: Create an employer profile for taxes and pension contributions. Here are some cheap and easy tricks that will keep your Persimmon warns on profits and slashes dividend by 75% as Record 330million prizes will be paid to Premium Bonds UK's electric car revolution stalls: Britain falling fourth best-selling new passenger vehicle in March, eliminate BIK tax for employees taking an EV via salary sacrifice, Do not sell or share my personal information. Personal lease: Monthly cost of petrol for Corsa 1.2 SE Edition = 105.53. I think for the lease to become worthwhile in purely cash terms over four years the Volvo would need to be worth only about 30% of its original value in 2026, have had a huge amount spent on maintenance, or diesel shooting up to seriously astronomical levels per litre, none of which I think is realistic. Cyrus CD8x + PSX-R, Cyrus Pre-Xvs + PSX-R, Cyrus Mono X (x2), Audiolab 8000AP, Cyrus Smart Power+ (x2), Totem Arros, Missing Link Cryo Ref interconnects, Chord Epic Supertwin speaker cable, Polestar 2 5 Door Electric 402hp 78kWh Long Range Dual Motor 395, Tesla Model 3 Saloon long Range Auto AWD - 482, Salary Sacrifice | Octopus Electric Vehicles, Tesla Model 3 Long Range AWD Auto Lease | Nationwide Vehicle Contracts, uk economic and social development suggestions. Setting up on the scheme is easy. There might be hidden fees that wont appear until later in the implementation.. 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. Octopus Lease prices are higher because they are a leasing company that is considerably smaller than the market leaders and they have a higher cost of capital. Offer corporate leasing, corporate pool cars and car sharing. Octopus may introduce Authority, firm reference number 809736, company number 10754317. Since they dont have a direct relationship with leasing companies, they cant charge a commission. Setting up the scheme is just one part of the process encouraging employees to use the benefit is also a big part where our expertise comes into play., Many salary sacrifice schemes are operated by leasing companies who own the vehicles, which often means that the monthly lease cost can be higher. Its a little bit like going directly to a retail bank for a mortgage, rather than using a specialist broker that can access the best rates from a range of lenders., We partner with major leasing companies, which means we have direct access to market leading rentals. 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. By comparison, combustion vehicles are subject to a typical BIK tax of 25 to 35 per cent. Body type. It is available to all businesses particularly those with fewer than 1,000 employees which may struggle to access similar schemes. Salary sacrifice: Monthly cost of fuel for Corsa-e SE Premium = 10.50. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. Heres How Were Democratising Electric Vehicle Access At Loveelectric.. Salary sacrifice: Monthly cost of tyres for Corsa-e SE Premium = 0. 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? This has been updated for the current tax year of 2022/23. Employers and employees who want everything bundled together and include a charging solution and home energy tarriff. United States Salary Tax Calculator 2022/23, United States (US) Tax Brackets Calculator, Statistics Calculator and Graph Generator, Grouped Frequency Distribution Calculator, UK Employer National Insurance Calculator, DSCR (Debt Service Coverage Ratio) Calculator, Arithmetic & Geometric Sequences Calculator, Volume of a Rectanglular Prism Calculator, Geometric Average Return (GAR) Calculator, Scientific Notation Calculator & Converter, Probability and Odds Conversion Calculator, Estimated Time of Arrival (ETA) Calculator, Input your total annual salary (the gross figure), Put in the annual contribution from your employer, Also put in the annual contribution that you pay, You can convert employee savings to pension contributions simply select Yes or No, Select the percentage of employer's National Insurance that the employer wants to retain. You also want to ensure employees have an outstanding customer experience when ordering a car. It is just structured in a different way. The overall process is meant to be cost neutral for businesses as they can recover VAT and also save as they make lower National Insurance contributions due to the salary sacrifice - bothare used to calculate the employer's gross sacrifice. 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. But much depends on what you do next. The Nissan Leaf is one of the most popular electric vehicles currently leased by Octopus. Octopus On average UK drivers can expect to pay around 484 per year, according to Nimble Fins. 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. Employees pay Benefit in Kind tax on benefits they get from their employer on top of their salary. Lease prices are higher because they are a leasing company that is considerably smaller than the market leaders and they have a higher cost of capital.. Sorry Scotland. Lease vs subscription. But it is now its own dedicated leasing company, meaning it will own the vehicles themselves. Note: Looking to get started with a salary sacrifice scheme that has no hidden cost and offers the best early termination policies? Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. Each calculator provides the same analysis of pay but is simplified to allow you to enter your salary based on how you are used to being paid (hourly, daily etc). A good level of cover will typically include roadside assistance; home recovery; national recovery; parts and repairs; and onward travel. Make. Tusker primarily works with companies with 1,000+ employees. The cost of the MOT isnt a problem for most drivers, but the cost of repairs that the MOT uncovers can be hefty. This website uses the TMDb API but is not endorsed or certified by TMDb. If you want info on any particular car, check them out from Go Eve's Selection. Take advantage of our salary scheme through your employer. Early termination only covers 10% of claims or ten cars whichever is greatest. Speak with our expert team to discuss your EV needs, order your car and we'll deliver to you as soon as it's available. Body type. Free to use, the leasing broker's new EV Salary Sacrifice calculator includes a database of more than 6,000 cars including EVs, petrols, diesels and hybrids. 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 will see a reduction in your salary, you will pay less tax and National Insurance and the employer will also pay less in their contributions to NI. The rate went up to 1% in April 2021, and changed again in April 2022 to 2%. Drivers can get hit with costly bills of hundreds, if not thousands of pounds when something goes wrong with their car. So, if, in 3 years, you pay it off, keep it, it's going to running it as the only outgoing and, a depreciating asset. For context: -Mid 30s, father of 2 -Salary roughly 95k I've always bought nearly new cars and run them a long time (as is the FIRE way, Skoda Octavia FTW! Change the numbers to suit you. Shortest delivery time. It's also 100% anonymous, in case you were wondering. included with our EV salary sacrifice scheme? A collection of really good online calculators. 2. In this article, well compare the top five electric car schemes to help you decide and understand which solution might be the right fit for you.. Monthly cost of the personal lease Corsa 1.2 SE Edition = 399.52. Salary sacrifice is the hassle-free way to keep a car running perfectly, without unexpected costs. Money that you'd normally never see (because it goes straight out of your pay to HRMC) goes directly towards paying for your car. all staff, senior team only. An MOT is a legal requirement that costs around 55 per year. Make. You already have all the answers you need." loveto join? 1 min read. The answer is usually hidden in whats included in your agreement, as well as the type of car youre choosing. 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. Will employees get their questions answered quickly. 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. We've split our Car Salary Sacrifice calculator between employers and employees. AIUI, the EV is then subject to 1% / 2% BIK until the end of tax year 2024/25 and anything could happen after that. 1150 PA. Don't forget, as with any investment, that it can fall as well as rise. Jump To Car Salary Sacrifice Calculator Anyway, if anyone interested in asking their employer to sign up to the scheme and has a car in mind I don't mind having a quick look for you to see a rough guide price. 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. 5. Ideally, you want the confidence that employees will take advantage of the benefit and thats something that the provider should help with.. Personal lease: Monthly cost of lease for Corsa 1.2 SE Edition = 190.04. British Vehicle Rental & Leasing Association (BVRLA) member number: 10549. We often link to other websites, but we can't be responsible for their content. Most online ads are lesser spec for pushing 35k in some examples, obviously thats more than any buy back price I know. Get started with loveelectric for free. These contributions are taken from your salary before tax and National Insurance are paid, so are tax efficient. 'Salary sacrifice is essentially a zero-cost, zero-effort tool for businesses to fight climate change and save the planet. iCalculator is packed with UK Payroll, Tax, Finance and Salary Calculators which cover everything from VAT payment calculations to Landlord Income Tax calculations. The BiK rates are calculated based on the cars CO2 emissions. ), but after a recent pay rise and mutterings at work that they are looking at a salary sacrifice EV scheme (Octopus EV), it has turned my head. When you agree to a salary sacrifice scheme, you agree to reduce your earnings (that's what you pay tax on) in exchange for something else. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. 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.. And at loveelectric, we provide one of the best policies on the market. 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.. 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. Ok this was acceptable. You can calculate your take home pay based of your annual income, PAYE, NI and tax for 2023/24. When you lease a new car, youll usually make an initial payment at the start of the contract. You get taxed a small amount for the benefit of having the car, whilst making other savings on Income Tax and National Insurance. It is simple to follow and shows how you can benefit from doing this. Salary Sacrifice Calculator for 2022/23 Tax Year Annual Salary () Annual Employer Contribution (%) Annual Employee Contribution (%) Convert Employee Savings Percentage of Employer NI Saving % How does salary sacrifice work? Inclusive of this is insurance, servicing and maintenance and 'generous' early termination terms for the business should the employee leave. WeVee is a car leasing company that offers electric cars via corporate leasing, car sharing as well as the salary sacrifice scheme.. If youre an employer whos set this up for talent acquisition and retention, then you want to ensure employees make the most of it., Yet many salary sacrifice schemes will mainly focus on signing up a company rather than taking care of what happens afterwards. For example, make sure to ask what the providers partners are. 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. Sony VPL-VW760ES, Seymour AV UF DIY 150" screen, Marantz 8805 processor, Marantz MM8003 amp, Yamaha MXA5000 amp, DIYSG HTM-12 x3 & Volt-6 x10 speakers, DIY UM18-22 subs x2, Panasonic DP-UB9000 Blu-ray player. Money that youd usually never see because it goes straight out of your pay to HMRC will now go directly to paying for your car. 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. Use our EV salary sacrifice calculator below to find out how much you could save each month. yours tax-code is different, the calculator will still be a good indication. For example, if their gross monthly lease is set at 500 per month for a 24-month term and they resign at month four, the termination fee would be 500. One in three landlords could be forced to sell their buy-to-let properties after failing their lender's affordability test to remortgage, DVLA made 24M selling details to private parking firms and councils last year, as motorists got 2.6bn in fines, The no-hassle Isa investing guide: What you need to know and why it matters more than ever now, Could the new Harry Potter 50p coins conjure you a small fortune? You can calculate results based on either a fixed cash value or a certain proportion of your salary. Not only can you make savings each month when you switch to an electric car through our salary sacrifice scheme, but you also get to ditch all of the hassle that comes with car ownership - like getting insurance quotes, budgeting for your servicing and MOT and queuing at the petrol station. Because electric cars produce zero emissions theres no road tax to pay. When taking out a personal lease, youre paying for your car from your income or savings after youve already paid tax. LEASE SUBSCRIPTION. 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. Salary sacrifice lets you make contributions to your pension and helps to save on National Insurance at the same time. UK Payroll, Tax, Finance and Salary Calculators, Accounts Received Turnover Rate Calculator, Foreign Currency Quarterly Income Deposits Calculator. However, that means youll want to know how much that commission is. None require an upfront deposit from an employer or employee. Then just click the "Calculate" button to see the savings. Salary sacrifice. Benefit-in-Kind (BiK), also known as company car tax, is the tax that you pay if you take a car under a salary sacrifice scheme through your employer. The sacrifice the employee makes out of gross salary is 726 which, after tax, is equivalent to paying 435. 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. Octopus Electric Vehicles Limited is authorised and regulated by the Financial Conduct Well also replace all four tyres for you based on Fair Wear and Tear within 20,000 miles free of charge so youll have no unexpected garage bills. Insurance is an essential part of keeping your car on the road. Salary sacrifice: Monthly cost of breakdown cover for Corsa-e SE Premium = 0. All payments are taken from your salary automatically, so you have no extra bills to worry about. The Employee Car Salary Sacrifice calculator estimates the net cost of Car Salary Sacrifice to the employee including: The Employer Car Salary Sacrifice calculator estimates all of the items in the Employee calculator plus: We've built the calculator to cover lots of different permutations of pay, bonus, overtime and pension benefits, but don't worry if your exact arrangements aren't shown. 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. The lot. Essentially, salary sacrifice means employees agree to give up part of their salary in exchange for a benefit, in this instance the benefit is a 'green' car. However, Nissan now has a share of 31 per cent compared to 22 per cent last year whilst Audi's have a share of five per cent, up from three per cent in 2020. Option to buy the car at the end of the agreement (however you wont get a settlement figure in advance). HMRC treats the benefit separately from your salary, which means you pay the tax before it arrives into your bank account. Also bear in mind the wait for the Tesla MAY be long, may be quick. So, it can be a win-win situation. Read this guide to Salary Sacrifice and How Salary Sacrifice can reduce the amount of tax you pay. Its a financial commitment that needs time and money to manage. 7,998.40 - is the effective 'additional' salary that I'm to be taxed on (Total cost of vehicle X BiK rate) 7,620.00 - is the salary im sacrificing (company has to pay 635 a month for the vehicle so 635 X 12) 40,000.00 - My current taxable salary 32,380.00 - My taxable salary after we remove the sacrificed salary 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. So their fee comes out of charging double rent for the first 6 months, as well as an additional fee to the employer.. Inside Octopus EV podcast . 'We are thrilled to see so many customers offering our service to their employees already and the signs are that many more will sign-up in 2021.'. Editor, Marcus Herbert, https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23035. KIA, Polestar, Mercedes, VW and Porsche also all have a share. 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. Personal lease: Monthly cost of tyres for Corsa 1.2 SE Edition = 10.83Through our salary sacrifice scheme, well cover punctures and sidewall damage. This can only happen when your employer adjusts the terms of your contract. Your car is ready to go when you are. The more realistic comparison would be between personally leasing a petrol or diesel car versus taking an EV via a salary sacrifice scheme. Electric charge point and installation are also optional. 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. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. This does not affect our editorial independence. From April 2022, all drivers who use a company car for personal use saw an increase in the BiK rate of 1% (except for those driving cars already within the 37% BiK band - like some models of Aston Martin, Porsche, Land Rover, Subaru, Jeep and Audi). 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. Europe's busiest forums, with independent news and expert reviews, for TVs, Home Cinema, Hi-Fi, Movies, Gaming, Tech and more. We ran a comparison between two makes of Vauxhall Corsa - a petrol Corsa 1.2 SE Edition, and its electric equivalent, the Corsa-e SE Premium. 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. Salary sacrifice: Monthly cost of MOT, maintenance, servicing and repairs for Corsa-e SE Premium = 0. Once you've inputted your company details we'll give you a call to get you set up. 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. Employees can do test drive days possibly only for larger companies. Filter. 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. Start by creating a personal profile with salary and tax details. Some employers choose not to include insurance, but its up to your company. 50,271 to 100,000. If you don't have all the details then allow about 5 minutes to work through the stages of the calculator. To calculate your BiK rate you need three numbers: P11D value of the car x BiK tax band x your income tax bracket. This is because these factors impact on how much you might be recharged by your employer in a Car Salary Sacrifice plan. 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. Love Electric Financial Services Limited is authorised and regulated by the Financial Conduct Authority; firm reference number 743264.