Following the Chancellor’s Autumn Statement last week, Andy Bruce, CEO of Glasgow-based fleet management and leasing specialist Fleet Alliance, says the substantial savings enjoyed by salary sacrifice will remain firmly in place.

Fleet Alliance CEO, Andy Bruce

Salary sacrifice is set to remain the choice for thousands of employees wishing to move to electric cars following Chancellor Jeremy Hunt’s Autumn Statement.

The Chancellor told a packed House of Commons that Benefit-in-Kind on EVs would go up from 2% to 3% in 2025/26, to 4% in 2027/27, and to 5% in the year 2027/28. This compares favourably with petrol or diesel cars which face company car tax rates routinely between 20% to 37% of the car’s list price.

Fleet Alliance is currently campaigning to democratise the electric car through its employee electric car salary sacrifice scheme, using the hashtag #ElectricCarsAreForEveryone.

Now, following the Chancellor’s Autumn Statement, the substantial savings enjoyed by salary sacrifice remain firmly in place.

The announcement by the Chancellor to keep BiK rates benign on EVs will ensure we can continue to encourage as many drivers as possible to switch to zero emission motoring, whether they are company car drivers or employees benefiting from a progressive electric car salary sacrifice scheme.

Drivers choosing a salary sacrifice scheme can drive an electric vehicle at a far more accessible rate than if they were to lease the same car privately, thanks to tax and National Insurance reductions. While there is still Benefit-in-Kind tax to pay on the vehicle, it remains at a significantly low rate to encourage the uptake of electric cars.

I think this gives the fleet sector the reassurance that the Government continues to support the green agenda, and ensures we can continue working with employers who wish to drive their ESG2 agenda forward. With salary sacrifice they can do that by offering electric cars to all their employees who don’t qualify for an electric company car.

We’re underlining the inclusivity of our electric car funding programme (https://www.fleetalliance.co.uk/funding/salary-sacrifice/electric-car-scheme/) in a new campaign aimed at promoting the benefits of low-cost zero emission driving for all via a salary sacrifice arrangement.

The Chancellor also announced that Vehicle Excise Duty (VED) – more commonly known as road tax – would also apply to electric cars from April 2025. This means that the first year VED will rise from £0 to £10, and then to the standard rate of £165 in the second year.

While this is an additional cost, we don’t believe it’s enough to dissuade drivers from the many benefits of switching to electric.