A new campaign highlighting that salary sacrifice schemes open up electric vehicles to all levels of employees has launched from Fleet Alliance.

The savings for salary sacrifice compared to personally leasing a car are significant

The leasing and fleet management specialist is promoting the benefits of low-cost zero-emission driving for all via a salary sacrifice arrangement, using the hashtag #ElectricCarsAreForEveryone.

The scheme highlights that employee savings under a salary sacrifice scheme are generated by the reduction in gross salary, which produces reductions in income tax and National Insurance Contributions (NIC).

Such savings can be offered to all employees – regardless of whether they qualify for a company car – underlining the inclusivity of the electric car funding programme.

“We see this as the democratisation of electric cars, making them available to everyone,” said Andy Bruce, chief executive.

“Company car drivers are already making substantial Benefit-in-Kind tax savings by switching to electric cars. We want to offer the same benefits to non-company car drivers through our salary sacrifice product where the savings over personally leasing a car are significant.”

But there are also important benefits to employers, including advancing the ESG agenda, as well as offering an appealing staff attraction and retention benefit in a period when the labour market is particularly tight.

To illustrate the savings available, Fleet Alliance cites the example of a 40% taxpayer taking an electric Mini Cooper SE on its salary sacrifice programme on a 36-month contract covering 5,000 miles a year.

If an employee was to lease the Mini personally out of post-tax earnings, the car would cost £643 a month, with extra to pay for any service or maintenance.

But under the Fleet Alliance salary sacrifice programme, the same car would cost the driver just £356 a month, including all BiK tax, servicing as well as maintenance – a saving of more than £280 a month, without taking into account any SMR costs. Over the three-year agreement, the electric car salary sacrifice would save more than £10,000.

Given its many benefits, it’s not surprising that salary sacrifice schemes are soaring in popularity.

Fleet Alliance currently has over 100 customers taking its salary sacrifice scheme, but expects this to double within the next 12 months. Its own corporate fleet went fully electric in mid-2021.

According to the BVRLA, salary sacrifice is the fastest growing funding method in the UK; salary sacrifice fleets increased by 41.2% during Q1 2022, reaching a total of 35,134 cars.

Andy Bruce added: “It’s difficult not to see how this is a winner all-round. Employers offer a benefit that is attractive and advances their environmental agenda; employees pay less to drive a modern and technologically advanced vehicle; and local urban air quality is improved thanks to zero emissions. Where’s the downside?”