Any driver who uses a company car for personal use pays BiK tax out of their monthly wage. Octopus may introduce Use our quote tool to see what we can offer you and your team. Also bear in mind the wait for the Tesla MAY be long, may be quick. Even though leasing might seem like a cheaper way to drive, the unexpected costs of running the car can quickly stack up. The calculation uses the most common tax-code of "1257L". 4,000 free miles of home charging with Intelligent Octopus. Tesla Model 3's are the most popular car to get through Octopus' salary sacrifice scheme. You can save up to 40% on the cost of a brand-new electric car when you use our salary sacrifice scheme. This is Money is part of the Daily Mail, Mail on Sunday & Metro media group. Not a broker or leasing company: they are an authorised representative of a third party broker, Maintenance, servicing, MOT, breakdown cover and tyre replacements are optional rather than automatically included.. Our dedicated team are on hand to support whenever you need it. Electric car drivers can take advantage of cheap, 100% renewable energy overnight with the Intelligent Octopus EV tariff from Octopus Energy. Get started with loveelectric for free. A collection of really good online calculators. Youll still have to sort out insurance, servicing, maintenance, MOT, repairs and fuel costs. Sign a simple contract to sign up to our free service. Octopus has been providing salary sacrifice for the last year but only as a broker for other leasing companies. Once you've inputted your company details we'll give you a call to get you set up. The P11D value is the list price of your car including VAT, combined with any delivery charges, but doesnt include the cars first registration fee or annual road tax. New to Salary Sacrifice? But if you know these details you can make the calculation more accurate by starting with the Employer profile rather than start as an Employee. Octopus may introduce Get 4,000 miles of Electroverse credit to use across the UK's charging network. Personal lease: Monthly cost of petrol for Corsa 1.2 SE Edition = 105.53. You already have all the answers you need." Or if we enter a period of financial difficulty and need to make some employees redundant? We work with a range of partners, including benefit providers and consultancies, to support their clients to drive electric. Perhaps a concrete example would make this clearer. Octopus Electric Vehicles reserves the right to stop this promotion at any time. Employees can do test drive days possibly only for larger companies. It simply means their rental prices cannot match the ones of large leasing companies. Having now been able to generate a quote I'm afraid I could not justify the purchase on anything other than evangelical environmental reasons. I think it sounds a great scheme but for me it simply would not be cost effective. Salary sacrifice is a way of getting access to a brand new car through your gross salary and saving up to 40%. No queuing. Benefit-in-Kind (BiK), also known as company car tax, is the tax that you pay if you take a car under a salary sacrifice scheme through your employer. Read this guide to Salary Sacrifice and How Salary Sacrifice can reduce the amount of tax you pay. You do, however, pay Benefit in Kind tax (BIK), which - for electric vehicles - is only 1% for the year 2021/22, and 2% for the year 2022/23. For context: -Mid 30s, father of 2 -Salary roughly 95k The average annual mileage of drivers in the UK is 6,300 miles a year, or 525 miles per month. Revolut auditor waves the red flag over 477m of unverified revenues but bosses insist they will STILL get a banking licence! At all times, if an employee resigns they can transfer the lease to another employee or take the lease with them to their new employer (if eligible) at no extra cost. By comparison, combustion vehicles are subject to a typical BIK tax of 25 to 35 per cent. . 'Salary sacrifice is essentially a zero-cost, zero-effort tool for businesses to fight climate change and save the planet. This is the really fun part. (adsbygoogle = window.adsbygoogle || []).push({}); All Tax Calculators on iCalculator are updated with the latest Tax Rates and Personal Allowances for 2023/24 tax year. Salary sacrifice: Monthly cost of fuel for Corsa-e SE Premium = 10.50. There is unlikely to be a penalty on 0% APR but, yes, there needs to be a way of paying off the finance slightly before the sale. You to a panel of third-party lenders or hirers and in such circumstances may receive a Win-win! Before getting into the specifics of each scheme, note that most of the five electric vehicle salary sacrifice car schemes include the following: Since were the ones who are writing this article, we thought we would start with ourselves. You can get a brand new electric car, plus everything you need to hit the road in it, through your company with our Business Contract Hire. For me the clincher was just how all inclusive it was. There might be hidden fees that wont appear until later in the implementation.. 17 min read. Octopus said many drivers are saving 30 to 40 per cent and some up to 60 per cent. The above example relies on the motorist driving 8,000 miles a year for four years and also makes the assumption that the company is eligible to recover VAT - 50 per cent on Finance and 100 per cent on Services. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. By essentially giving up a portion of your salary, the amount you get paid is reduced which decreases the amount of income tax and National Insurance you pay.Read more frequently asked questions about salary sacrifice here. Drop us an email and well be in touch within 24 hours. When you agree to a salary sacrifice scheme, you agree to reduce your earnings (that's what you pay tax on) in exchange for something else. 1150 PA. Employees can access both combustion and electric cars. If this is quite important for your company, then a different supplier might be a better fit., An electric car home charger isnt included in our package, but we will put you in touch with one of our partners who will install a charger at home for a discounted rate.. Alternatively, this can be a cost-effective way for an employer to start a pension scheme, if they are setting out on this road. Employers and employees who want everything bundled together and include a charging solution and home energy tarriff. It is just structured in a different way. The salary sacrifice tax savings are particularly attractive for me. Are their answers a little wishy-washy and not specific? An electric car salary sacrifice scheme is a way for your employees to get an EV as an employee benefit and save on tax. As we mentioned above, each salary sacrifice monthly lease will be different and include different services. Because this payment comes out of your pay before any tax, it reduces your salary and in turn lowers your income tax and national insurance payments too. Promote the employee benefit internally using our simple marketing materials. These contributions are taken from your salary before tax and National Insurance are paid, so are tax efficient. There are no investment guarantees and you can end up with less than you put in via investments. It will rise to 2 per cent over the next three years. They offer cars via contract hire and salary sacrifice. Because our electric car salary sacrifice is one all-inclusive price that covers everything you need to hit the road, this comparison gives drivers savings of nearly 70 per month while letting them switch to a brand new, top-spec electric car. We do not allow any commercial relationship to affect our editorial independence. Will employees get their questions answered quickly. These benefits are non-cash. Octopus Electric Vehicles Limited is authorised and regulated by the Financial Conduct below). For other cars no. No standing. It is the tax and National Insurance savings that will pay for your sacrificed contributions. Inclusive of this is insurance, servicing and maintenance and 'generous' early termination terms for the business should the employee leave. A quick valuation on Carwow last night though had it at 34-35k. Jump To Car Salary Sacrifice Calculator Theres a lot to think about - from insurance to maintenance, repairs, MOT, breakdown and tax. In addition, 8,000 free miles of green electricity with home energy from Octopus Energy enough for an average UK driver to drive for free for a year. How are you going to help us activate employees? You may already be familiar with other salary sacrifice schemes, for example things like cycle to work, pension or childcare schemes. Also, there is a slight bump to take care of loan car and also the fact that resignation (and some other things) do allow you to give the car back at no penalty (so they have to get that back somewhere). Personal lease: Monthly cost of MOT, maintenance, servicing and repairs for Corsa 1.2 SE Edition = 22.50. Salary sacrifice: Monthly cost of tyres for Corsa-e SE Premium = 0. Keep in mind that this amount cannot be salary sacrificed so the fee will the gross amount before taxes. www.octopusev.com K kyle123 Standard Member Apr 9, 2021 #13 gangzoom said: This is the 'offer' from my employer. Sounds like something to report to the appropriate oversight body if they are telling you their way of leasing is cheaper AFAIK, theres nothing illegal about it - but while an employer only uses one company to provide the leases, theres no incentive to lower the price to what it should be, as theres no competition. : Companies that have a staff base that can afford double-rentals for the first six months. I think if I still had my previous car I might consider it more but with a relatively new car that I was very lucky to get a great deal on earlier this year its just not possible to balance the sums favourably. This calculator generates factual information about the potential effect of . November 2022 Electric car salary sacrifice is a way of driving an electric car for less by giving up some of your gross salary. *The P11D value that HMRC uses is basically the list price minus the government EV grant, more Well-maintained tyres keep you safe on the road and make your travel more fuel-efficient, but if theyre not well looked after they can result in your car failing its MOT. Fiona Howarth, chief executive of Octopus Electric Vehicles, said: 'Salary sacrifice makes electric cars a no brainer making them significantly cheaper than their petrol or diesel counterparts. You may also find the following Finance calculators useful. You are tied in to their full bundle, which may be right for some employees, but almost certainly will not be right for all employees. If youre an employer whos set this up for talent acquisition and retention, then you want to ensure employees make the most of it., Yet many salary sacrifice schemes will mainly focus on signing up a company rather than taking care of what happens afterwards. With a personal lease, your monthly lease payments depend on the length of your contract, how much deposit you paid upfront, and how many miles you plan to drive each year. You to a panel of third-party lenders or hirers and in such circumstances may receive a Our salary sacrifice scheme offers absolutely everything that you need to hit the road in your brand new electric car including a free home charger, insurance, servicing, maintenance, breakdown and tyres, all in one easy monthly payment. Octopus is best known as an electricity and gas provider, but in 2018 they branched out to electric vehicles and the salary sacrifice scheme.. Registered office and trading address: 101 Rose Street South Lane, Edinburgh, EH2 3JG. Well also replace all four tyres for you based on Fair Wear and Tear within 20,000 miles free of charge so youll have no unexpected garage bills. BCH and selected Salary Sacrifice deals. Were comparing a petrol version of the Corsa with an electric one of a higher spec, because most drivers will expect the EV to be more expensive. We understand that loveelectric might not be a good fit for everyone and that other salary sacrifice companies might be a better fit at times. From April 2022, all drivers who use a company car for personal use saw an increase in the BiK rate of 1% (except for those driving cars already within the 37% BiK band - like some models of Aston Martin, Porsche, Land Rover, Subaru, Jeep and Audi). You can calculate results based on either a fixed cash value or a certain proportion of your salary. Essentially, salary sacrifice means employees agree to give up part of their salary in exchange for a benefit, in this instance the benefit is a 'green' car. You just need your employer to sign up first.Fill in your company details so we can get in touch - it wont cost them a penny but it might earn you a few brownie points. commission. Not much post-care or educational content for employees. The calculation for the . We offer everything for you to hit the road in a brand new EV. Before 2021, EVs were exempt from paying any BiK tax. Alternatively, just sell it and pay off the finance. Our salary sacrifice scheme is the perfect choice if you want to make savings on switching to electric through your salary, and ditch the hassle of car ownership. HMRC treats the benefit separately from your salary, which means you pay the tax before it arrives into your bank account. The best part is that the payment for your salary sacrifice car comes straight out of your monthly salary, before tax, in one easy payment - saving you time and money. Authority, firm reference number 809736, company number 10754317. In this article, well compare the top five electric car schemes to help you decide and understand which solution might be the right fit for you.. Make sure you know what is included in the monthly lease and exactly what happens in case of early termination, including: Getting the scheme set up is just half of the work: the other half is encouraging employees to use the portal and order a car. With most leases, the monthly price only includes the cost of the car. Ideally, they should have a document that clarifies the responsibilities of each party, so you are not liable for employee errors. All the answers you need. separately from your salary, which means you pay the before... Evs were exempt from paying any BiK tax out of their Monthly wage quote I afraid... Our editorial independence and your team media group leasing companies it and pay the. And repairs for Corsa 1.2 SE Edition = 22.50 internally using our simple marketing.... 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Waves the red flag over 477m of unverified revenues but bosses insist they will still get a banking licence salary! Night though had it at 34-35k your company details we 'll give a! Proportion of your gross salary and saving up to 40 % and your.! Might seem like a cheaper way to drive, the unexpected costs of running the car can stack! Employees can do test drive days possibly only for larger companies Corsa 1.2 SE Edition 22.50... Commercial relationship to affect our editorial independence save the planet combustion and cars! Of large leasing companies employees can access both combustion and electric cars the clincher just!

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