Volkswagen Financial Services UK (VWFS) has launched a new salary sacrifice car scheme to help drivers switch to EVs and plug-in hybrids.

The scheme enables businesses and their employees to accelerate towards a more sustainable and cost-effective future, drawing on Volkswagen’s range of fully electric and plug-in hybrid cars.

The new VWFS scheme makes EVs more affordable and accessible for businesses and drivers across the UK. Salary sacrifice offers a raft of benefits for businesses and their employees. The sal-sac mechanism lets employees exchange part of their gross salary for a non-cash benefit – in this case, a brand-new electric or plug-in hybrid car. This delivers significant financial advantages for both employers and employees.

Benefits include tax efficiency. Employees still need to pay company car tax but fully electric cars currently attract a Benefit-in-Kind (BiK) rate of just 3% – much lower than the 30% that applies to many petrol and diesel cars. Plug-in hybrid electric vehicles (PHEVs) with low CO emissions also benefit from low BiK rates.

Businesses can also typically save £80 to £100 per employee per month on Class 1A National Insurance contributions, while employees enjoy lower National Insurance deductions, depending on circumstances. Many companies use their savings to reduce the overall cost of car rentals for their employees.

Drivers and fleets also gain access to a fully inclusive package from VWFS with no upfront payment or credit checks, along with claimed class-leading lifestyle support to cover unforeseen changes such as redundancy or long-term illness.

The VWFS scheme is cost-neutral for employers: Volkswagen Financial Services UK manages the entire process, from set-up to compliance, at no cost to the business. The scheme includes insurance, servicing, maintenance, breakdown cover and 24-hour Driverline support – all backed up by VWFS fleet specialists to help reduce administrative burden.

The boost in employee benefits helps companies to attract, reward and retain staff. Drivers can choose from a broad range of vehicles; from the compact ID.3 to the ID.4, ID.5 and the ID.7 and ID.7 Tourer. Volkswagen’s PHEV line-up includes the Golf, Tiguan and Passat eHybrid models, which can deliver up to 88 miles of electric-only range along with low CO2 emissions plus rapid charging capability.

And the scheme also supports corporate environmental, social and governance (ESG) goals by promoting low-emission travel.

Fleets can access expert support and a dedicated online portal for easy scheme management.

VWFS is also providing support for home chargers and on-the-road EV charge cards.