The price of gasoline has made electric vehicles more enticing than ever, but the cost of one may be deterring you from making the transition. A little-known tax benefit could be the difference between success and failure. If you can convince your boss to join, you’ll be able to cut the cost of renting a brand-new electric vehicle in half. Employees have had the option of using a salary sacrifice scheme to purchase a new bicycle or even childcare vouchers for years. Employers are coming up with the reality that providing electric cars to their employees has a lot of advantages.
A higher-rate taxpayer (particularly those who are earning over £50,271) can generally reduce the cost of having to lease a famous Tesla Model 3 from £524 to £267 a month by opting for this option instead of a traditional lease, according to the newly established Edinburgh-based loveelectric, which specializes in supplying electric vehicles through salary sacrifice schemes. This is based on a 48-month lease and a 5,000-mile annual mileage agreement.
“A lot of people are still unaware that electric vehicles have a ‘bike to work’ program,” explains Steve Tigar, who is the man behind loveelectric. He claims that the current gasoline crisis has heightened interest in electric vehicles. Because the car lease payments are subtracted from your gross wage, you’ll pay less national insurance and income tax, and your employer’s national insurance contributions bill will be reduced as well.
“Higher-rate taxpayers can often half their monthly payments, but basic-rate taxpayers can also save significantly,” Tigar notes. “The case for switching electric was already solid, and now it’s overwhelming,” says Tigar, who promotes the program as “one nice little staff bonus that won’t cost you a thing.” The biggest challenge, according to Tigar, is finding sufficient electric cars to meet demand. The Tesla Model 3; which is his most-requested vehicle – has a two-month wait time, though he claims they can often get other models faster by negotiating directly with dealers.
Higher-rate taxpayers who keep driving a decent distance to work each day – 30-40 miles every way – who now spend £12 per day on gasoline will benefit the most from the plan. They can be able to lease an electric vehicle for the same amount. For higher-rate taxpayers, Loveelectric is now advertising the Nissan Leaf for £159 per month and the VW ID.3 for £173 per month.
The increase in national insurance due in April will only add to the scheme’s appeal. The fact that business car drivers will only have to pay a maximum benefit-in-kind business car tax rate of 2% on electric cars (EVs) until the year 2025 is the cherry on top. The only issue for many will be getting their company to offer the plan, however, several companies can handle the entire procedure on their behalf. Octopus Energy provides a program dubbed Electric Dreams and it is among the number of specialized companies that provide a one-stop-shop.