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Compensation & Benefits

Why adopting an EV salary sacrifice scheme could help to reignite your business

Lash Saranna, co-founder and CEO at EZOO, discusses why adopting an EV salary sacrifice scheme could help reignite your business.

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Why adopting an EV salary sacrifice scheme could help to reignite your business
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Salary sacrifice is by far the cheapest and most effective route to EV adoption, but data suggests that only 30% of UK companies currently offer a scheme to their staff. According to the British Vehicle Rental & Leasing Association (BVRLA), last year saw an impressive 123% rise in salary sacrifice schemes, but there is still significant potential among businesses to accelerate the transition to electrification. 

Power to the people

While some businesses are still hesitant when it comes to adopting an EV salary sacrifice scheme, employees are voting with their feet. Indeed, new data reveals that nearly half (48%) of UK workers consider access to a scheme a valuable benefit. What’s more, 60% of jobseekers cite it as a significant job choice indicator.

The EV salary sacrifice model is now relatively mature, with businesses such as ours having extensive experience behind them – ensuring a smooth transition from fossil fuel to EV power. For companies, the move is great for employee morale and motivation, while saving money (through lower tax and NI) and helping to reach sustainability targets.

Reducing costs, streamlining processes

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Salary sacrifice sees employees swap part of their pre-tax salary for a non-cash benefit – in this case a new or nearly new EV, with their taxable income resultingly reduced. As National Insurance (NI) contributions are calculated on this figure, businesses can also reduce their costs.

Moreover, the running costs of EVs are lower than their petrol / diesel equivalents, shaving valuable pounds of the typical servicing and maintenance bills. All in all, it’s a major benefit for both businesses and staff.

Making roles ‘sticky’

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The statistics bear out the principle that offering flexible, tax-efficient benefits is a great way of attracting and retaining talented team members.

In our experience, many businesses also report improved productivity and team morale as a result of introducing and nurturing employee benefit schemes. Indeed, with EVs gaining credibility among younger drivers, tax efficient access to the latest models of electric vehicles is considered a major perk.

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From the employee’s perspective, EV salary sacrifice is hugely attractive too. While these deals are often between 20-50% cheaper than personal leasing, there is no upfront deposit or personal credit requirement.

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Fade to grey?

The grey fleet – where employees use their own vehicles as a ‘company car’ – has grown hugely in recent years and is the bane of many fleet managers due to their ‘under the radar’ status. Often companies find it hard to manage grey fleets when it comes to servicing, maintenance and operational costs.

Adopting an EV salary sacrifice scheme can help companies to transition staff into safer, cheaper, better performing and more attractive cars. From the business perspective, this move can also help to streamline grey fleet expenses.

An important element of the EZOO solution (apart from all-inclusive monthly pricing including servicing, insurance and breakdown cover) is our brand agnostic ethos. The ability to offer employees the car of their choice, be it a Mini, VW, MG, Mercedes-Benz or Porsche, makes a big difference to their valued perception of the scheme. Greater choice brings greater satisfaction.

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It’s also important to choose a provider that can offer flexibility. We provide businesses with a highly competitive short-term subscription model, so staff can try EVs for just a couple of months. This acts as a powerful ‘try before you buy’ option before committing to a longer-term arrangement. For short term needs, such as fixed contract staff, or at times when an extra ‘pool car’ might be useful, this option is equally attractive. 

Given the positive headwinds, in terms of the UK Government’s attitude to EV taxation, now is definitely the time to make the switch. More importantly, by choosing an experienced EV solutions provider such as EZOO, you get a personal, all-inclusive service that makes the transition completely hassle-free. The perfect way to boost company morale, streamline operational costs and improve your sustainability in a single move. 

Lash Saranna is co-founder and CEO of EZOO

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