Rarely has there been a better time to take advantage of a salary sacrifice scheme. An electric vehicle isn’t taxed based on the salary that you give up, you instead pay tax on the value of the benefit in kind (BIK) tax. BIK is the value of the benefit you receive (the car) and right now for electric cars, BIK tax is 1% for 2021/22.
This 1% is incredibly low compared to around 30% on a petrol or diesel car that is taken as a salary sacrifice. By leasing an all electric car you will get all of the VAT benefits of a salary sacrifice scheme plus you’ll be driving a brand new car and joining the all important ‘road to zero’ by embracing electric driving.
This low BIK this won’t last forever, we already know it will rise to 2% in 2023 so our advice is don’t delay, contact our team who are on hand to advise you on the best electric vehicles for your needs.
You can contact us here and browse some of our all-electric vehicles available here. Why not subscribe to our weekly emails and get the best offers and available vehicles straight into your inbox. Fill in your details here.
What is salary sacrifice?
A salary sacrifice arrangement is an agreement with an employer to reduce an employee’s entitlement to salary, usually in return for a non-cash benefit, such as a car.
What is benefit in Kind?
Benefits-in-kind. These are benefits that an employee receives that cannot be converted into cash but have a cash value.