Amending the existing salary sacrifice rules for lowest-paid workers would stop them penalising the very people they are designed to protect, according to Fleet Evolution.  

Fleet Evolution founder and managing director Andrew Leech says the current salsasc rules are impacting lower-paid workers

Under the current rules mean that no employee can enter into a salary sacrifice scheme for assets of any kind, including cars, if the arrangement would then take their take-home pay below the National Living Wage (NLW). The latter currently stands at £9.50 per hour.  

It’s meant to stop the lowest-paid workers from getting into financial hardship and ensure they have a minimum standard of living.  

But Andrew Leech, MD of  EV salary sacrifice and fleet management specialist Fleet Evolution, argues that it’s actually impacting such workers – and that the system needs changing to put a caveat in about salary sacrifice.   

He points to the case of a teaching assistant at a local academy who’s running a 1.0-litre Ford Fiesta EcoBoost with a total annual running cost of £6,560, including an annual fuel cost of £1,469, which equates to over £540 a month.  

The assistant wanted to switch to an all-electric Nissan Leaf with a monthly rental of under £300 a month via the Fleet Evolution salary sacrifice scheme.   

However, she wasn’t eligible as the sacrifice would have taken her below the NWL, despite the fact this would have saved her around £240 a month.  

“For staff in lower pay brackets, like our teaching assistant, being able to have an electric car under a salary sacrifice scheme means they can save substantial sums against the cost of running their own vehicle. But the current NLW rules actually discriminate against them and prevent them from doing that.”  

Fleet Evolution says the savings from having an electric car under a salary sacrifice scheme are often in the region of £300-£400 a month – a significant proportion of a lower-paid worker’s monthly take-home salary, especially when living costs are coming under unprecedented pressure.  

“At the same time, by switching to an EV, they would also be making a major contribution to reducing their carbon footprint by running a vehicle with zero carbon emissions when the Government is looking to move away completely from fossil fuels,” Leech added.  

And for employers, making salary sacrifice cars available to all employees, especially the lower-paid, could show them in a positive light while providing a valuable benefit to employees.  

Reports from Fleet Evolution can help reinforce the case for switching to EVs by providing carbon output reporting, showing the impact of switching away from ICE models and the level of CO2 emissions that can be saved by making such a move.   

“This management information reporting not only portrays the environmental impact of running EVs instead of ICE models, but also the annual savings in CO2 emissions that fit in with any CSR policy,” added Andrew Leech.