Offering Electric Vehicles To Your Employees

The cost of living crisis is increasing inflation dramatically right now and it's never far away from the front pages. However, at the heart of all this uncertainty is energy pricing. Maybe offering electric vehicles to your employees is worth it now?

I often get asked how an employer can help their team with ways to reduce costs or increase net pay in the most tax-efficient way. One area that is generating great interest right now is electric vehicles (EVs) offered as company cars.

There are benefits to offering an EV as a company car:

- lower taxable benefits in kind on EVs when compared with petrol or diesel cars
- reduced employee and employer National Insurance contributions when provided through salary sacrifice arrangements, resulting in increased employee net pay
- no taxable benefits in kind on installing chargers at employees' homes, or when cars are charged at the employer's premises
- a tax deduction of up to 100 per cent for the employer on the cost of buying the EV and charging equipment
- free charging at many retail and other public sites/car parks
- lower business mileage costs and reduced fleet servicing and maintenance costs for the employer
- lower commuting costs for staff
- clear environmental benefits

Employers can extend the offer of Electric Vehicles beyond the 'job need' to all employees via a salary sacrifice scheme. The monthly cost of leasing and running the cars are covered by the employee through salary reduction in return for the car being provided for daily use.

This is very tax efficient for both the employer and the employee and some of the additional benefits include:

- a fully maintained and insured new car with no credit check or finance and/or deposit required
- no residual value risk, as would be present if the car were owned privately
- a cash lump sum for selling their current car
- reduced commuting and other running costs

There are many factors to consider when deciding on introducing EVs to the company car fleet, but the adoption of EVs is growing rapidly and with other cost pressures on both employers and employees, now may be the time to look at it seriously.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.