Confirmation that salary sacrifice vehicles are not affected by the National Insurance changes in today’s Budget has been broadly welcomed by the fleet sector.

In today’s speech to the Commons, Chancellor Rachel Reeves announced that the Government is capping NICs relief on salary sacrifice into pension schemes to the first £2,000 of pension contributions per person from 2029.

The Treasury said the changes would “increase fairness, while protecting ordinary workers”.

However, salary sacrifice for car schemes are not affected by the move, despite fears that Reeves could end the National Insurance exemption on salary sacrifice in general.

Toby Poston, chief executive of the BVRLA, said: “Car salary sacrifice has been a powerhouse of the EV transition, so retaining long-term government support for this and the current Benefit-in-Kind regime is welcome. It provides much needed certainty to the sector that continues to deliver the majority of EV registrations, for all corners of society.”

Chris Joyce, managing director of Sogo Mobility, said the decision means salary sacrifice remains a reliable route into cleaner vehicles.

And Thom Groot, CEO of The Electric Car Scheme, said the retention of electric vehicle salary sacrifice in its current form would “help more middle-income working families to access cleaner transport they otherwise couldn’t afford, delivering positive health and societal outcomes that benefit everyone”.

He continued: “Salary sacrifice schemes have already helped 680,000 drivers make the switch to EVs. Last year, 20% of new cars sold were electric and 40% of them were acquired through these schemes.

“Our research shows that employees who have access to EV salary sacrifice schemes are three-four times more likely to make the switch over those without access to financial support – 52% of those who have used EV salary sacrifice are basic rate taxpayers. With 51% growth in uptake during 2024 alone, salary sacrifice is rapidly becoming the largest catalyst of EV adoption in the UK.

“It’s fundamentally reshaping how ordinary working families access clean and affordable transport.”

Following today’s news, Drax Electric Vehicles stressed how important it is that EVs remain protected within salary sacrifice schemes.

Adam Hall, director of energy services, said: “These schemes remain one of the most effective ways to help drivers access their first EV and play a critical role in supporting the UK’s transition to cleaner transport.

“EV salary sacrifice is also a highly valued workplace benefit. Industry data suggests that around a quarter (27%) of employees say access to an EV salary sacrifice scheme makes them more likely to stay with their employer. Protecting these schemes is essential – they support adoption, help businesses retain talent, and keep the UK’s transition to electric moving forwards.”