We do not write articles to promote products. Copyright 2000-2023 M2N Limited E. & O.E. The salary sacrifice calculator aims to illustrate how such schemes work from both the employee's and employer's perspective and assuming a neutral impact on the employer. Octopus Alternatively, just sell it and pay off the finance. commission. Since they dont have a direct relationship with leasing companies, they cant charge a commission. This makes it easy for you to charge at night when power is cheapest. You can calculate your take home pay based of your annual income, PAYE, NI and tax for 2023/24. Octopus may introduce He noticed some other issues with salary sacrifice schemes and decided to set one up himself to address the market gaps and help democratise electric vehicle access., You can read more about our story here: Electric Cars are Expensive. A further 20 more models will be available later in 2021. Its a financial commitment that needs time and money to manage. Thats why we make it super easy for drivers who use our salary sacrifice scheme by covering everything they need to hit the road in one monthly payment. The actual amount will depend on which costs the employer wishes to take in to account. Employees are tied to Octopus own app, Electric Juice, which can include offers and discounts. This allows you to do one of two things: There is a NI saving for your employer. Its also incredibly important to read through the fine print, so you know what youre getting.. 3. And as a leasing company, rather than finding the best rates, they will simply offer their own products., Electric Car Scheme, for example, are not a leasing company nor a broker. Employees will pay a fixed monthly cost for the vehicle whichis made using their gross salary which is their income before tax or net salary plus their national insurance and income tax. When researching various electric vehicle salary sacrifice benefits, understanding which scheme might be the right fit for you and your company can often be challenging. We've pre-filled some sample data. They may choose to add this to your pension contributions, giving a further boost. Before 2021, EVs were exempt from paying any BiK tax. Octopus is best known as an electricity and gas provider, but in 2018 they branched out to electric vehicles and the salary sacrifice scheme.. Without Salary Sacrifice 663.00 per month* With Salary Sacrifice 445.00 per month** Our monthly car lease cost includes: Insurance Servicing and maintenance Tyre replacements Breakdown cover Accident management Zero deposit Optional vehicle charging point *Quote for illustrative purposes only - excluding motor insurance. According to Auto Express, 10% of cars that fail their MOT need new tyres. Have we let energy giants make too much profit? However, for the 2020 to 2021 financial year, the BiK rate for zero-emissions company cars was just 0 per cent meaning there was nothing to pay until this month, at which point it goes up to just one per cent. 1 Home Entertainment Tech Resource. Europe's busiest forums, with independent news and expert reviews, for TVs, Home Cinema, Hi-Fi, Movies, Gaming, Tech and more. loveelectric was founded when our CEO, Steve, wanted an electric car and realised that purchasing one was out of budget. This is why EV salary sacrifice schemes are such an attractive method of delivering a tax . Making Tax Calculations Simple. Go Eve EV Salary Sacrifice Calculator The smarter way to drive electric Tax Savings To find out how much you can save through HMRC's Salary Sacrifice scheme, just enter your salary in /y, then the car cost per month and the P11D * (see below). Salary Sacrifice can be either a fixed figure or percentage of gross pay. Wevee and loveelectric and other brokers make money by charging a commission on top of the rental. WeVee is a car leasing company that offers electric cars via corporate leasing, car sharing as well as the salary sacrifice scheme.. Oh, and it uses tax rates for England and We often link to other websites, but we can't be responsible for their content. HMRC treats the benefit separately from your salary, which means you pay the tax before it arrives into your bank account. 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. If you already have an electric car through your employer youll continue to enjoy super low BiK rates - saving money, and the planet, at the same time. 7,998.40 - is the effective 'additional' salary that I'm to be taxed on (Total cost of vehicle X BiK rate) 7,620.00 - is the salary im sacrificing (company has to pay 635 a month for the vehicle so 635 X 12) 40,000.00 - My current taxable salary 32,380.00 - My taxable salary after we remove the sacrificed salary One in three landlords could be forced to sell their buy-to-let properties after failing their lender's affordability test to remortgage, DVLA made 24M selling details to private parking firms and councils last year, as motorists got 2.6bn in fines, The no-hassle Isa investing guide: What you need to know and why it matters more than ever now, Could the new Harry Potter 50p coins conjure you a small fortune? None require an upfront deposit from an employer or employee. If the employee resigns after 3 months into the lease (and doesnt transfer the contract or take it with them to a new employer) they will only have to pay a one-off fee worth one month of the gross lease payment.. If they are self-insuring for specific claims, could that be a risk if they are hit with too many claims? Insurance is an essential part of keeping your car on the road. For me the clincher was just how all inclusive it was. To get started with our Car Salary Sacrifice calculator here's what you will need for each version . Don't worry if you haven't got all this yet - you can still estimate the cost impact using values our Car Salary Sacrifice calculator will provide automatically. Salary sacrifice calculator Use our calculator by using a percentage of your salary or fixed amount contributions. The more realistic comparison would be between personally leasing a petrol or diesel car versus taking an EV via a salary sacrifice scheme. This can only happen when your employer adjusts the terms of your contract. For the Tesla. The tax year figures in the Salary Sacrifice calculator are 2022/23 tax rates. The lot. If they've not signed up yet, send them our way. Personal lease: Monthly cost of lease for Corsa 1.2 SE Edition = 190.04. There are already many similar cycle to work schemes in place where workplaces provide their employees with bikes to get to and from their office. 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. This is Money is part of the Daily Mail, Mail on Sunday & Metro media group. Octopus may introduce 17 min read. This works when an employer and employee come to an agreement over salary. Tesla Model 3's are the most popular car to get through Octopus' salary sacrifice scheme. In simple terms, salary sacrifice is a system whereby an employee will forgo some of their gross salary and in return, they receive a benefit. Early termination only covers 10% of claims or ten cars whichever is greatest. In this case, the company pays 745.41 plus an unrecoverable VAT of 53.19 which equals 798.60. Salary sacrifice: Monthly cost of insurance for Corsa-e SE Premium = 0. 5. Ideally, they should have a document that clarifies the responsibilities of each party, so you are not liable for employee errors. Octopus said many drivers are saving 30 to 40 per cent and some up to 60 per cent. When you lease a car youll put down an upfront deposit, make monthly payments and then either return the car to the leasing company at the end of the contract, or you might have the option to buy the car at the end of the lease. Refer your clients to give them access to our electric car salary sacrifice scheme. 1. There you go, the saving is in the 450 month you're paying as HP. Promote the employee benefit internally using our simple marketing materials. 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. 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.. Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. Who is loveelectric good for? Benefit in Kind tax is calculated based on two things: the cars CO2 emissions and the cars P11D value. How are you going to help us activate employees? Salary sacrifice: Monthly cost of fuel for Corsa-e SE Premium = 10.50. Salary sacrifice is a way of getting access to a brand new car through your gross salary and saving up to 40%. 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. At home charger and installation is included in the lease cost. Always remember anyone can post on the MSE forums, so it can be very different from our opinion. Most importantly, you want to ensure the company knows what theyre talking about and can offer guidance. 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. Here are some cheap and easy tricks that will keep your Persimmon warns on profits and slashes dividend by 75% as Record 330million prizes will be paid to Premium Bonds UK's electric car revolution stalls: Britain falling fourth best-selling new passenger vehicle in March, eliminate BIK tax for employees taking an EV via salary sacrifice, Do not sell or share my personal information. It's quick, easy and free to join. Meet the smart meter addicts: The dad who cut back on 1p coffees, the teacher on a 5.50 daily gas limit and the mum so obsessed she hid hers in a drawer! 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. An electric car salary sacrifice scheme is a way for your employees to get an EV as an employee benefit and save on tax. Feb 24, 2023. Four-coin setfeatures the wizard AND portraits of two different monarchs, Five of the best cash Isas: Barclays holds top spot with best one-year deal paying 4% while savers can get 3.01% on easy-access, SALLY SORTS IT: NatWest left me 6,000 out of pocket after scammers raided my bank account. 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). AVForums.com is owned and operated by M2N Limited, Fixed AmountPercentage of Salary, Annual Employee Contribution (%) Maintenance and insurance can optionally be added. Early termination only covers 10% of claims or ten cars - whichever is greatest. But much depends on what you do next. You save on National Insurance on the amount of your salary that you sacrifice. 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). For other cars no. Companies of any size that want to offer employees an affordable car and care about a good car ordering and employee experience. All rights reserved. Ok this was acceptable. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. According to the Nimble Fins research, the average petrol car driver in the UK spends around 1,272 a year on fuel to get from A to B, at a cost of around 20.1p per mile. Salary sacrifice: Monthly cost of salary sacrifice for Corsa-e SE Premium = 330.08 Maintenance, Servicing and Repairs An MOT is a legal requirement that costs around 55 per year. Electric charge point and installation are also optional. The cost of the MOT isnt a problem for most drivers, but the cost of repairs that the MOT uncovers can be hefty. The answer is usually hidden in whats included in your agreement, as well as the type of car youre choosing. Octopus The salary sacrifice tax savings are particularly attractive for me. Use our EV salary sacrifice calculator below to find out how much you could save each month. It also assumes the employer wishes to reflect any net savings they made in National Insurance by reducing the gross sacrifice so an adjustment of 10 per cent has been made. Theres also the BiK, but that's pretty insignificant in comparison to bulk amount. Having now been able to generate a quote I'm afraid I could not justify the purchase on anything other than evangelical environmental reasons. Customers ask us why the total cost of an electric car through salary sacrifice can seem higher than taking out a personal lease. The BiK rates are calculated based on the cars CO2 emissions. The Employer Car Salary Sacrifice calculator estimates all of the items in the Employee calculator plus: employer's national insurance contributions employer's pension scheme contributions VAT recovery and business tax relief the employer's total cost of Car Salary Sacrifice before and after tax relief/recovered VAT Our salary sacrifice car scheme offers a number of tax and personal benefits savings for the employee who pays for their electric vehicle from their gross salary before tax. The 2% rate is fixed until April 2025 at 2%, and then will increase by 1% each year until 2028. Some employers choose not to include insurance, but its up to your company. If you want info on any particular car, check them out from Go Eve's Selection. Prepare for peak pothole season! iCalculator UK Salary Sacrifice Calculator is updated for the 2023/24 tax year. 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. Full electric cars are exempt from Vehicle Excise Dutybut drivers still have to pay Benefit-in-Kind tax if you are going to run one as a company car. However, Nissan now has a share of 31 per cent compared to 22 per cent last year whilst Audi's have a share of five per cent, up from three per cent in 2020. Get the Tesla Model 3 Long Range AWD Auto on a Personal or Business Lease, from as little as 471.99, and with FREE UK delivery. Read more frequently asked questions about salary sacrifice here. For example, make sure to ask what the providers partners are. 'With incredibly low company car tax rates on EVs, demand has never been higher almost a third of employees want the option of an EV as a company car and our own enquiries from businesses have risen seven-fold in the last year alone. Check out the video below to find out more. Their monthly lease prices may be higher because they are middle-men to middle-men, serving as an appointed representative of a broker. Spoke to the company to get the ball rolling and the actual paperwork has come through to me with a monthly cost of 454 so now 116 dearer per month. Octopus Electric Vehicles Limited is authorised and regulated by the Financial Conduct Not much post-care or educational content for employees. You to a panel of third-party lenders or hirers and in such circumstances may receive a If the employee resigns in under 3 months (and doesnt transfer the contract or take it with them to a new employer) early termination protection cannot be applied and the employee would be liable for up to 50% of the rest of the lease. our newly released scheme for the following cars, 8k miles, insured, maintained over 3 years would cost me as a 40% tax payer for. It may not display this or other websites correctly. Because electric cars produce zero emissions theres no road tax to pay. Although many are legitimate and offer a great service, some are simply looking for a quick commission fee and will have artificially high monthly payments to cover costs.. They offer a StopGap car while you wait for your new car. A collection of really good online calculators. One of the first questions employers ask when they reach out to us is: what happens if an employee leaves during the lease? Octopus Electric Vehicles' new scheme gives employees access to every EV on the market with a range of over 100 miles of which there are over thirty, up from just five in 2017. Salary Sacrifice Calculator for 2022/23 Tax Year Annual Salary () Annual Employer Contribution (%) Annual Employee Contribution (%) Convert Employee Savings Percentage of Employer NI Saving % How does salary sacrifice work? The BiK rates range from 2% for zero and low emissions vehicles, all the way up to 37% for cars that create more pollution, The BiK rate for electric cars has increased from 1% to 2% from 6th April 2022, and is currently fixed until April 2025, From April 2025, the BiK rate will increase by 1% every year until 2028, Your income tax bracket (e.g. Companies with 1,000+ employees that want to offer combustion cars and possibly a salary sacrifice scheme. Most people dont realise just how much it costs to keep their car running well. VAT registration number 386404284. JavaScript is disabled. Shortest delivery time. 4,000 free miles of home charging with Intelligent Octopus. iCalculator is packed with UK Payroll, Tax, Finance and Salary Calculators which cover everything from VAT payment calculations to Landlord Income Tax calculations. 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. They offer cars via contract hire and salary sacrifice. for use in every day domestic and commercial use! This means your net pay will go down by the amount you pay for the car, minus your tax savings. A dealer etc will arrange this 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. Electric car drivers can take advantage of cheap, 100% renewable energy overnight with the Intelligent Octopus EV tariff from Octopus Energy. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. On average UK drivers can expect to pay around 484 per year, according to Nimble Fins. We offer everything for you to hit the road in a brand new EV. There might be hidden fees that wont appear until later in the implementation.. It is simple to follow and shows how you can benefit from doing this. Select a specific online salary sacrifice calculator from the list below to calculate your annual gross salary (after salary sacrifice adjustment) and net take home pay after deductions. Once you set up the salary sacrifice scheme, employees will have many questions, so its important that someone on their team is responsive and can answer all their questions.. Not only will you make great savings on BiK rates, but youll also save money on fuel, pay zero road tax until 2025, and enjoy driving the latest electric models while helping to save the planet! With salary sacrifice for an electric car, as an employee you're not taxed on the salary you give up. I think it sounds a great scheme but for me it simply would not be cost effective. Fill out this short enquiry form. For example, if their gross monthly lease is set at 500 per month for a 24-month term and they resign at month four, the termination fee would be 500. What will the onboarding experience be like for the employee? New: Octopus Electric Vehicles has launched a new salary sacrifice scheme for businesses. Sort by. loveto halve the cost of your new electric car? Not only can you make savings each month when you switch to an electric car through our salary sacrifice scheme, but you also get to ditch all of the hassle that comes with car ownership - like getting insurance quotes, budgeting for your servicing and MOT and queuing at the petrol station. Help your employees benefit from one of the best employee benefit schemes going without it costing you a penny.