Fleet Electric Leasing

Salary Sacrifice Scheme

A salary sacrifice scheme enables your employees to acquire a brand new company car, fully serviced, maintained and insured for either 2 or 3 years – all they have to do is add fuel or charge the vehicle.

How does a Salary Sacrifice Scheme Work?

An employee saves money by exchanging part of their annual salary for a car and added services before it is taxed, thereby reducing the amount of tax and national insurance they pay. The employee will get a brand new fully maintained and insured vehicle, cheaper than they could otherwise obtain. The car will be treated as a company car for tax purposes.

The employer sources the employee’s desired vehicle(s) via Fleet Electric and provides it to the employee as well as deducting the full cost from the employee’s salary. The employer will benefit from reduced National Insurance Contributions (NICs) and corporation tax relief. The car will be treated as a company car for tax purposes.

Fleet Electric provide the employer with access to the funders who can provide a brand new fully maintained and insured vehicle for the purpose of a salary sacrifice scheme. Through Verified Carbon Standard and Gold Standard projects, Fleet Electric will offset the carbon produced in the making of each vehicle.

What are the Benefits of a Salary Sacrifice Scheme?

Due to the favourable Benefit-in-Kind rates for electric and plug-in hybrid company cars, a salary sacrifice scheme is the most cost-effective way to drive a brand-new electric car. Although the benefits don't stop at low company car tax, there are a plethora of benefits for both the employee and the employer.

Employee Benefits

Employer Benefits

The most cost-effective way to drive a brand-new electric car

In addition to the employers fleet discounts and VAT savings, the employee will reduce the amount of Income Tax and National Insurance they pay.

Employee Retention & Recruitmentd

An employee benefit allowing staff access to a brand new car with everything included at a fixed cost for the contract period.

All servicing, insurance and road tax costs covered

Maintenance, servicing, insurance, road tax, accident management, tyres and breakdown cover are all included, the employee just adds electricity or fuel.

Reduced Carbon Footprint

Encourages low-emission motoring due to financial and tax benefits of electric and plug-in hybrid vehicles, plus Fleet Electric will offset the carbon produced in the making of each vehicle.

No Credit Check

Due to the payment for the vehicle being made via the employee’s salary they do not need to pass any credit checks.

National Insurance Savings

The reduction in the employee’s salary decreases the National Insurance Contribution (NIC) made by the company.

Insurance for partners and family

An additional two named drivers can be added to the fully comprehensive fixed insurance policy, which must be 18+ years old.

Corporation Tax Savings

Electric & plug-in hybrid vehicles below 50 g/km of CO2 qualify for 100% of the rental to be offset against corporation tax.

Brand new car every 2 or 3 years

With no deposits or an old vehicle to sell, the employee can change their car every 2 or 3 years with ease.

Lower Grey Fleet Risk

Meet legal obligations to ensure that an employee’s vehicle is reasonably safe to use, fit for purpose and lawfully on the road.

Employee Eligibility

All we ask is that employees must have completed at least 6 months of employment to qualify. They must also consider whether they are going to remain in your employment during the contract to avoid early termination charges.

If your staff are given a cash allowance, all of the allowances can go towards payment of the vehicle using this scheme, unlike personal finance where the payment is subject to tax and NI deductions.

Employer Risk Mitigation

Should an employee leave the business mid-contract for any number of reasons, we offer solutions to minimise the financial risk to the employer.

Reason for Leaving Employment

Solution

Unpaid Leave Events (Statutory Maternity Pay & Statutory Sick Pay & Adoption Leave*)

Costs of rental are covered for the first 12 months of absence

Employment Terminated on Medical Grounds

Zero early termination fee

Employee resigns or is dismissed

Early termination fee applies to the employee (see below for more detail)

Early Termination due to Redundancy

10% of live contracts can be terminated at zero early termination fee in the event of redundancy in any 3 year period

*Subject to a six month exclusion period from the date of vehicle delivery to the date an employee goes on maternity/paternity/adoption leave

Termination Fees

If the employee voluntarily leaves employment or is dismissed before the end of the vehicle contract term they will be required to return the vehicle and pay the termination fees. The termination fee and any other amounts will be deducted from the employee’s final salary by the employer.

The termination fee applicable depends on the month in which the contract termination occurs, see below example and matrix.

Example:

  • Employee resigns 25 months into a 36-month lease, with a monthly rental of £400
  • Termination cost as per matrix = £1,200 (3 rentals)
Month in Which Termination Occurs 36 Month Contract Termination Penalty

24 Month Contract Termination Penalty

1

9 x monthly rental

7 x monthly rental

2

9..

7..

3

9..

7..

4

9..

6..

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9..

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6

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11

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14

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16

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18

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19

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30

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31

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32

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36

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Salary Sacrifice Frequently Asked Questions

 

Employee Log-in

 

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