The Employee Car Salary Sacrifice calculator estimates the net cost of Car Salary Sacrifice to the employee including: The Employer Car Salary Sacrifice calculator estimates all of the items in the Employee calculator plus: We've built the calculator to cover lots of different permutations of pay, bonus, overtime and pension benefits, but don't worry if your exact arrangements aren't shown. Their monthly lease prices may be higher because they are middle-men to middle-men, serving as an appointed representative of a broker. Ok this was acceptable. Personal lease: Monthly cost of breakdown cover for Corsa 1.2 SE Edition = 14.08With our salary sacrifice package, breakdown is included at no extra cost, so you dont need to worry about getting your own roadside assistance. 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. Body type. 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. You to a panel of third-party lenders or hirers and in such circumstances may receive a Our tax calculators are designed to make it easy for you to understand how much you pay and how your money is divided up. All the set-up is carried out by your employer. Employees are tied to Octopus own app, Electric Juice, which can include offers and discounts. A further 20 more models will be available later in 2021. Get 4,000 miles of Electroverse credit to use across the UK's charging network. You can sign up for the Octopus EV tariff bundle without being part of their salary sacrifice scheme. Authority, firm reference number 809736, company number 10754317. That's the group's vision and the website goes on to explain more about that goal. Ideally, they arent spending hours trying to order a car, and the experience is relatively intuitive. Early termination only covers 10% of claims or ten cars whichever is greatest. The answer is usually hidden in whats included in your agreement, as well as the type of car youre choosing. HMRC treats the benefit separately from your salary, which means you pay the tax before it arrives into your bank account. Are they self-insuring, or do they have a legitimate third-party and comprehensive insurance provider? Tesla Model 3's are the most popular car to get through Octopus' salary sacrifice scheme. Sort by. Heres how the costs of the two cars stack up against each other. included in the lease price. This provides savings of 290 per month, inclusive of income tax and national insurance with just 14 in BiK tax and equates to savings of 13,920 over a four year period. For context: -Mid 30s, father of 2 -Salary roughly 95k Salary sacrifice: Monthly cost of MOT, maintenance, servicing and repairs for Corsa-e SE Premium = 0. Our salary sacrifice monthly payments include absolutely everything you need to hit the road: car, charger, insurance, servicing, maintenance, breakdown and tyres. iCalculator UK Salary Sacrifice Calculator is updated for the 2023/24 tax year. Make. 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. This site uses cookies to allow good user experience. How electric car salary sacrifice plans work, How to implement an electric car salary sacrifice plan, How to participate in an electric car salary sacrifice plan, unrecoverable VAT on lease rentals and disallowed tax relief, the adjustment to pay required under Car Salary Sacrifice, the difference in tax, NIC and pension scheme contributions between 'cash' pay and Car Salary Sacrifice, the net pay and net delivered value of the employee's pay packet before and after Car Salary Sacrifice, employer's national insurance contributions, the employer's total cost of Car Salary Sacrifice before and after tax relief/recovered VAT, A monthly contract hire quote for the car the employee wants, including maintenance and breakdown recovery, Your business's tax rate and VAT recovery rate, A decision on whether or not you will reclaim unrecoverable VAT on contract hire rentals from the employee, If the car is not electric, whether or not you will reclaim unrecoverable business tax relief on lease rentals from the employee, Your monthly pay and your tax code - a copy of your last payslip should have the details, A monthly business contract hire quote for the car you want, including maintenance and breakdown recovery. Personal lease: Monthly cost of insurance for Corsa 1.2 SE Edition = 40.33. An employer can set up a salary sacrifice scheme and must mention the scheme in your contract or terms and conditions of employment. Not much post-care or educational content for employees. We also partner with over 300 car dealerships, which means we almost certainly have access to the car youre looking for at the very best lead time. Additionally, we can often secure additional discounts from the car dealerships meaning that the final rental for the employee is even lower than our published rates. It also means that our monthly lease prices are almost always the best on the market., Although a core part of what we do is sourcing the vehicles and arranging the finance agreements behind the scenes, we also help employers set up the scheme, educate employees and offer assistance throughout the entire engagement.. No filling. Volvo assume 400 insurance, 150 tax, 300 tyres, 300 servicing. This means your net pay will go down by the amount you pay for the car, minus your tax savings. 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. We've split our Car Salary Sacrifice calculator between employers and employees. 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. 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. Some 15 companies are already live on the scheme, including Huel and Purplebricks, making it available to 1,491 employees across the UK. Read more frequently asked questions about salary sacrifice here. That means we can set you up with the scheme from start to finish. 1 min read. www.octopusev.com K kyle123 Standard Member Apr 9, 2021 #13 gangzoom said: This is the 'offer' from my employer. Youll still have to sort out insurance, servicing, maintenance, MOT, repairs and fuel costs. If The comments below have not been moderated. is a credit broker and a vehicle hirer but not a consumer credit lender. We ran the numbers to compare whats included in the total cost, and whether salary sacrifice, or a personal lease, is a cheaper way of getting a car when you take everything into account. The whole package We offer everything for you to hit the road in a brand new EV. This is why EV salary sacrifice schemes are such an attractive method of delivering a tax . They offer a StopGap car while you wait for your new car. The cost of the MOT isn't a problem for most drivers, but the cost of repairs that the MOT uncovers can be hefty. Access 6 hours of super off-peak green energy between 11.30pm to 5.30am. and provides a breakdown of your annual salary with Monthly, Quarterly Weekly, Daily and Hourly pay illustrations. Read this guide to Salary Sacrifice and How Salary Sacrifice can reduce the amount of tax you pay. Contact us at hello@loveelectric.carsloveelectric is a trading name of Love Electric Financial Services Limited, a company registered in Scotland, Company Number 374952. When selecting an electric vehicle salary sacrifice scheme, there are a few things you want to look out for: Leasing a car means entering a long-term relationship with a provider, which means its important that you feel comfortable with the provider and trust that they will follow through on what they say.. Salary sacrifice calculator Use our calculator by using a percentage of your salary or fixed amount contributions. The overall process is meant to be cost neutral for businesses as they can recover VAT and also save as they make lower National Insurance contributions due to the salary sacrifice - bothare used to calculate the employer's gross sacrifice. Sorry Scotland. Record 330million to be paid to Premium Bonds winners this month: Total payouts now exceed 25billion since the first draw in 1957, Put warmth at a fair price above pushing smart meters and heat pumps, says LEE BOYCE: It would be better to spend money keeping our energy prices down. Or if we enter a period of financial difficulty and need to make some employees redundant? Ideally, you want the confidence that employees will take advantage of the benefit and thats something that the provider should help with.. ICO reference number: ZB075747. It's also 100% anonymous, in case you were wondering. New: Octopus Electric Vehicles has launched a new salary sacrifice scheme for businesses. Then it might be a sign that they dont have high standards or simply dont fully understand the complexity of an EV salary sacrifice scheme. Is commercial property a great value investing opportunity? Its a financial commitment that needs time and money to manage. British Vehicle Rental & Leasing Association (BVRLA) member number: 10549. Employers and employees who want everything bundled together and include a charging solution and home energy tarriff. Refer your clients to give them access to our electric car salary sacrifice scheme. The numbers are based on a 40-year-old driver who earns 40,000, lives in South London and drives 8,000 miles a year. If you click on them we may earn a small commission. Alternatively, this can be a cost-effective way for an employer to start a pension scheme, if they are setting out on this road. You get taxed a small amount for the benefit of having the car, whilst making other savings on Income Tax and National Insurance. BiK has historically been very low for electric cars to encourage the uptake of low emissions vehicles as the UK moves towards decarbonising transport. If you're using the Employee Car Salary Sacrifice calculator we'll make some assumptions about how your employer will deal with business issues such as unrecoverable VAT on lease rentals and disallowed tax relief. This can only happen when your employer adjusts the terms of your contract. All allow you to customise your car: from the colour and trim to the interior and additional features, you can personalise your brand new car to your requirements. Salary sacrifice: Monthly cost of salary sacrifice for Corsa-e SE Premium = 330.08. Employees can do test drive days possibly only for larger companies. Youll need to replace all four tyres every 2 years on average. Octopus may introduce They may choose to add this to your pension contributions, giving a further boost. The 2% rate is fixed until April 2025 at 2%, and then will increase by 1% each year until 2028. At present, the most popular car ordered is the Tesla Model 3, which was also the fourth best-selling new passenger vehicle in March. 5. 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.. yours tax-code is different, the calculator will still be a good indication. Before 2021, EVs were exempt from paying any BiK tax. With our salary sacrifice scheme, fully comprehensive insurance is normally included in your monthly payment. Personal lease: Corsa 1.2 SE Edition initial payment = 389.03 (equivalent to 1 month lease + broker fee of 198.99)When you get your car through our salary sacrifice scheme theres no upfront cost. 2. Once you've inputted your company details we'll give you a call to get you set up. Setting up on the scheme is easy. iCalculator UK Salary Sacrifice Calculator is updated for the 2023/24 tax year. Who is Octopus EV good for? Use our quote tool to see what we can offer you and your team. According to Auto Express, 10% of cars that fail their MOT need new tyres. Salary. Salary sacrifice: Monthly cost of fuel for Corsa-e SE Premium = 10.50. The cost of a personal lease is cheaper at face value than a salary sacrifice car, but thats because it doesnt take into account all of the extra running costs that need to be factored in. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. 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. Salary sacrifice lets you make contributions to your pension and helps to save on National Insurance at the same time. What's included with our EV salary sacrifice scheme? 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. Electric Dreams aims to support the growing number of employees looking to go electric using salary sacrifice which could ultimately help them save thousands of pounds on both national insurance and income tax. A collection of really good online calculators. Always remember anyone can post on the MSE forums, so it can be very different from our opinion. Drivers that order an EV through Electric Dreams before July 2021 also receive a free smart charger fully installed by the Octopus Energy Services team. You can calculate your take home pay based of your annual income, PAYE, NI and tax for 2023/24. For me, base Tesla Model 3 (the company car classic, I know) is 600 salary sacrifice p/m, My marginal rate is 41% - comprised of 20% IT, 12% NICs and 9% Student Loan, So the 600 sacrificed reduces my monthly net pay by 354. Lets run the same calculation with a petrol, diesel and hybrid car: If youre a shareholder or company director who's looking to make savings on BiK and fuel costs, an electric car is the best choice for you. Electric car drivers can take advantage of cheap, 100% renewable energy overnight with the Intelligent Octopus EV tariff from Octopus Energy. You can save up to 40% on the cost of a brand-new electric car when you use our salary sacrifice scheme. Filter. 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. Love Electric Financial Services Limited is a credit broker and not a lender. Yes, you give up part of your gross income to pay for the car. So, if, in 3 years, you pay it off, keep it, it's going to running it as the only outgoing and, a depreciating asset. This has been updated for the current tax year of 2022/23. Leases are 24-48 months contracts for new cars. Also worth saying that, comparing the Volvo for the lease is correct in principle. Setting up the scheme is just one part of the process encouraging employees to use the benefit is also a big part where our expertise comes into play., Many salary sacrifice schemes are operated by leasing companies who own the vehicles, which often means that the monthly lease cost can be higher. Its a little bit like going directly to a retail bank for a mortgage, rather than using a specialist broker that can access the best rates from a range of lenders., We partner with major leasing companies, which means we have direct access to market leading rentals. You to a panel of third-party lenders or hirers and in such circumstances may receive a iCalculator is packed with UK Payroll, Tax, Finance and Salary Calculators which cover everything from VAT payment calculations to Landlord Income Tax calculations. Salary sacrifice is the hassle-free way to keep a car running perfectly, without unexpected costs. Affiliate links: If you take out a product This is Money may earn a commission. Salary sacrifice. A lot of electric car schemes require a consultation or a call to understand the pricing and what is included. Their early termination policy covers dismissal. So their fee comes out of charging double rent for the first 6 months, as well as an additional fee to the employer.. Since they do not own the relationship with the leasing company, they wont have full responsibility over their regulatory conduct, systems and processes. It is available to all businesses particularly those with fewer than 1,000 employees which may struggle to access similar schemes. Octopus Electric Vehicles continues to offer business contract hire leasing packages as a broker. Keep in mind that this amount cannot be salary sacrificed so the fee will the gross amount before taxes. 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. 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. 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). Customers ask us why the total cost of an electric car through salary sacrifice can seem higher than taking out a personal lease. 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. The launch comes as EVs reach a tipping point thanks to falling cost, government incentives and changing attitudes towards zero emission vehicles. There has been a surge in demand for EVs as people become more environmentally conscious. Here are the key things you need to know about the BiK rates: The low BiK rate of just 2% gives drivers a huge subsidy and employees can make big savings in tax when they switch to an electric car through their employer with salary sacrifice. 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. Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. loveelectric was founded when our CEO, Steve, wanted an electric car and realised that purchasing one was out of budget. Editor, Marcus Herbert, https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23035. But before you start our electric car salary sacrifice calculator, here's an explanation of what the calculator does and also the information you'll need to hand to get the most out of it. These contributions are taken from your salary before tax and National Insurance are paid, so are tax efficient. Within a fortnight due to the change in the government grant it jumped up by app 50 per month. If you take the same car through salary sacrifice, the 80 annual BiK tax would be split across your monthly payments, working out at just 6.67 per month. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. 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. Insurance costs can vary widely depending on what car you have, where you live, and other factors. None require an upfront deposit from an employer or employee. 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. Fixed AmountPercentage of Salary, Annual Employee Contribution (%) They all offer salary sacrifice schemes, which will allow employees to pay their monthly lease from their gross salary and therefore pay less in income tax and national insurance contributions. All you need to do is fill the car with electrons, get out there and enjoy the thrill of driving electric! Maintenance and insurance can optionally be added. When taking out a personal lease, youre paying for your car from your income or savings after youve already paid tax. 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. Our dedicated team are on hand to support whenever you need it. Sony VPL-VW760ES, Seymour AV UF DIY 150" screen, Marantz 8805 processor, Marantz MM8003 amp, Yamaha MXA5000 amp, DIYSG HTM-12 x3 & Volt-6 x10 speakers, DIY UM18-22 subs x2, Panasonic DP-UB9000 Blu-ray player. Sacrificing your salary can be in addition to your existing pension provision. Technically you are still paid the same. This works when an employer and employee come to an agreement over salary. Same here, and zero credit check etc. Your car is ready to go when you are. As you can see, our electric car salary sacrifice scheme really does cover everything you need to hit the road. Most people dont realise just how much it costs to keep their car running well. It is often a pension contribution. The cost of the MOT isnt a problem for most drivers, but the cost of repairs that the MOT uncovers can be hefty. VAT registration number 386404284. This does not affect our editorial independence. You to a panel of third-party lenders or hirers and in such circumstances may receive a Octopus said many drivers are saving 30 to 40 per cent and some up to 60 per cent. Offer corporate leasing, corporate pool cars and car sharing. 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. 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. Make sure to understand what youre paying for and what the terms are. 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. 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. 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. Take advantage of our salary scheme through your employer. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. 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. This is Money takes a look at Octopus Electric Vehicles' new programme and explains exactly how salary sacrifice schemes work. Employees can buy the car after the lease period is up (however you wont get a settlement figure in advance). One of the first questions employers ask when they reach out to us is: what happens if an employee leaves during the lease? This makes it easy for you to charge at night when power is cheapest. We often link to other websites, but we can't be responsible for their content. I think for the lease to become worthwhile in purely cash terms over four years the Volvo would need to be worth only about 30% of its original value in 2026, have had a huge amount spent on maintenance, or diesel shooting up to seriously astronomical levels per litre, none of which I think is realistic. November 2022 Electric car salary sacrifice is a way of driving an electric car for less by giving up some of your gross salary. 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! Pay in 10,000 for bonus. At home charger and installation is included in the lease cost. Octopus said many drivers are saving 30 to 40 per cent and some up to 60 per cent. Companies that are interested in business car leasing as well as salary sacrifice. Project Mondo G is a Mercedes G-Wagen in a puffer jacket, New Honda's Civic: family car with rebellious bad boy in its line-up, Advert for the 1998 first generation of the Audi TT, Ford scrapping 1,300 jobs in UK amid European overhaul. loveto halve the cost of your new electric car? We ran a comparison between two makes of Vauxhall Corsa - a petrol Corsa 1.2 SE Edition, and its electric equivalent, the Corsa-e SE Premium. 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. 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. Its a salary sacrifice scheme (a bit like cycle to work) in which your lease an electric car with payments deducted from gross salary (. Decide who you will open up the scheme to e.g. Whos Electric Car Scheme good for? You make the payments for your new car before you pay any tax, which in turn lowers your monthly income and means you pay lower Income Tax and National Insurance. You may already be familiar with other salary sacrifice schemes, for example things like cycle to work, pension or childcare schemes. ), but after a recent pay rise and mutterings at work that they are looking at a salary sacrifice EV scheme (Octopus EV), it has turned my head. We are no longer accepting comments on this article. Making Tax Calculations Simple. 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.. This makes it a very cost-effective way to lease an electric vehicle and allows you to save up to 40% on the cost of an electric car. With either Car Salary Sacrifice calculator you can always try it now, bookmark this page and then research any missing items to get a more acurate comparison when you have the details. . 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. Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. 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. The launch of Electric Dreams comes exactly one year on from the UK Government's move to eliminate BIK tax for employees taking an EV via salary sacrifice. 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 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. Drivers are saving 30 to 40 per cent your team their car running well set up a salary:. Exempt from paying any bik tax the Intelligent Octopus EV tariff bundle without being part of their salary sacrifice you... Depending on what car you have, where you live, and will... And tax for 2023/24 maintenance, MOT, repairs and fuel costs as the type of car choosing. 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