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. Salary sacrifice: Corsa-e SE Premium initial payment = 0. * Please note that these can be expressed as a cash amount or percentage of your salary, Annual Employer Contribution (%) Weve used Nimble Fins averages and our own research based on like-for-like services to crunch the numbers for this comparison. These benefits are non-cash. Tusker primarily works with companies with 1,000+ employees. Examples include the VW ID3 Pro at 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. HMRC treats the benefit separately from your salary, which means you pay the tax before it arrives into your bank account. All in one easy monthly payment. 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. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. Yes, you give up part of your gross income to pay for the car. New to Salary Sacrifice? Tusker monthly lease prices may be higher because they are a leasing company and offer lifestyle protection. 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? is a credit broker and a vehicle hirer but not a consumer credit lender. Thats where its important to have early termination protection in place. If you are going to chop it in, then you always have a monthly "payment" outgoing. Employees pay Benefit in Kind tax on benefits they get from their employer on top of their salary. Lease prices are higher because they are a leasing company that is considerably smaller than the market leaders and they have a higher cost of capital.. Fill out this short enquiry form. But much depends on what you do next. We've pre-filled some sample data. 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.. With our salary sacrifice package, well throw in a free home charger and 4,000 miles worth of free energy when you switch to Intelligent Octopus. ICO reference number: ZB075747. Who is loveelectric good for? Octopus Electric Vehicles has revealed a new 100 per cent electric car leasing service for businesses looking to become more environmentally friendly. Feb 24, 2023. Your initial deposit can be between 1 - 12 months of the monthly lease cost, so youre parting with anywhere from a few hundred to a few thousand pounds at the start of the process. Shortest delivery time. Offer corporate leasing, corporate pool cars and car sharing. No queuing. for use in every day domestic and commercial use! Having now been able to generate a quote I'm afraid I could not justify the purchase on anything other than evangelical environmental reasons. Car, charger, energy, insurance, servicing, maintenance, breakdown and tyres. By using it, you accept our use of cookies. For context: -Mid 30s, father of 2 -Salary roughly 95k No filling. iCalculator is packed with UK Payroll, Tax, Finance and Salary Calculators which cover everything from VAT payment calculations to Landlord Income Tax calculations. The optimal number of days a home needs to be on the market to get the best price from its sale, MARKET REPORT: Capco cheers West End recovery ahead of its 5bn mega merger with rival London landlord Shaftesbury, Persimmon to slash building of new homes with UK housing crisis set to deepen amid higher mortgage rates and the cost of living crunch, ReckittBenckiser sees profits soar as string of price hikes more than offset dwindling demand, Aston Martin losses mount on delayed deliveries and sterling weakness but carmaker's shares soar as it eyes positive cash flow in 2023, Bank of England governor Andrew Bailey says more interest rate hikes are 'not inevitable', Takeover of UK satellite giant Inmarsat ready for blast off as regulators give provisional green light to 5.4bn deal. For example, make sure to ask what the providers partners are. 'We are thrilled to see so many customers offering our service to their employees already and the signs are that many more will sign-up in 2021.'. But really, it's not. For example, for a 40 per cent tax rate payer opting for a Tesla Model 3, the typical net cost for an employee is 435 every month with the gross sacrifice from salary coming in at 726 per month. A dealer etc will arrange this for you. Here are some of the features and benefits of setting up a salary sacrifice scheme with loveelectric: Whereas other electric car schemes bolt on salary sacrifice as an additional feature to their core service offering, we are specialists in the salary sacrifice electric car 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. For a better experience, please enable JavaScript in your browser before proceeding. Then just click the "Calculate" button to see the savings. AIUI, the EV is then subject to 1% / 2% BIK until the end of tax year 2024/25 and anything could happen after that. Octopus Electric Vehicles reserves the right to stop this promotion at any time. For example, for a 40 per cent tax rate payer opting for a Tesla Model 3, the typical net cost for an employee is . 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. 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. www.octopusev.com K kyle123 Standard Member Apr 9, 2021 #13 gangzoom said: This is the 'offer' from my employer. We do not write articles to promote products. is a credit broker and a vehicle hirer but not a consumer credit lender. We've pre-filled some sample data. 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. According to Auto Express, 10% of cars that fail their MOT need new tyres. When you lease a new car, youll usually make an initial payment at the start of the contract. Your tax would change as your income has changed and need to be considered in tax returns. Companies of any size that want to offer employees an affordable car and care about a good car ordering and employee experience. 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The cleaner future of heating or noisy, ugly and pricey will Britain fall in love with heat pumps or do they risk being a green status symbol for the wealthy? The monthly lease could be too expensive for employees, or the early termination policy wont be a good fit. You can sign up for the Octopus EV tariff bundle without being part of their salary sacrifice scheme. Whos Electric Car Scheme good for? Before 2021, EVs were exempt from paying any BiK tax. 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. Octopus Electric Vehicles continues to offer business contract hire leasing packages as a broker. Octopus Electric Vehicles Limited is authorised and regulated by the Financial Conduct When taking out a personal lease, youre paying for your car from your income or savings after youve already paid tax. One of the reasons Octopus has decided to start the scheme now is thanks to the low company car tax rates on EVs which can make them a hugely beneficial option for those looking to help the environment. Employees are tied to Octopus own app, Electric Juice, which can include offers and discounts. 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. 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. 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. According to Nimble Fins the cost of road tax on a petrol car is 141, so youd usually need to budget for this cost too. Your car is ready to go when you are. 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. Wevee and loveelectric and other brokers make money by charging a commission on top of the rental. Body type. Make. The tool gives detailed before and after calculations of pay, tax and national insurance, showing the benefits of switching to a salary sacrifice plan. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. UK Payroll, Tax, Finance and Salary Calculators, Accounts Received Turnover Rate Calculator, Foreign Currency Quarterly Income Deposits Calculator. Benefit-in-Kind (BiK), also known as company car tax, is the tax that you pay if you take a car under a salary sacrifice scheme through your employer. If you want info on any particular car, check them out from Go Eve's Selection. Again, if you don't have all the car details then just accept the suggested finance and maintenance values that appear in our Car Salary Sacrifice calculator and use your own insurance premium as a starter. Salary sacrifice lets you make contributions to your pension and helps to save on National Insurance at the same time. Change the numbers to suit you. What's included with our EV salary sacrifice scheme? You can calculate your take home pay based of your annual income, PAYE, NI and tax for 2023/24. Now press "Calculate" to get the results. November 2022 Electric car salary sacrifice is a way of driving an electric car for less by giving up some of your gross salary. 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 sure that Octopus/Tasker are routinely hiking the price mind. included in the lease price. Have we let energy giants make too much profit? Companies with 1,000+ employees that want to offer combustion cars and possibly a salary sacrifice scheme. You never have to worry about an unexpected repair bill or missed insurance payment. Octopus said many drivers are saving 30 to 40 per cent and some up to 60 per cent. Refer your clients to give them access to our electric car salary sacrifice scheme. Tyres typically have a lifespan of around 20,000 miles and according to Honest John, tyres need replacing every other year at a price of 65 per tyre. Drivers can get hit with costly bills of hundreds, if not thousands of pounds when something goes wrong with their car. 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. Since they dont have a direct relationship with leasing companies, they cant charge a commission. Win-win! You will see a reduction in your salary, you will pay less tax and National Insurance and the employer will also pay less in their contributions to NI. So, it can be a win-win situation. 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. Lastly, you also want to make sure the scheme helps with post-sales care and helps employers encourage employees to sign up, whether its through webinars, educational material or incentives. 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. Also worth saying that, comparing the Volvo for the lease is correct in principle. loveto halve the cost of your new electric car? Monthly Salary Sacrifice Calculator for 2023/24 Tax Year Calculate your adjusted take home pay and deduction of Salary Sacrifice from your Gross Pay. . 2. All include car insurance, breakdown cover, servicing, repair and MOT (although some are optional). Below is a chart summarising some of the leading electric car schemes in the UK.. 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.. our newly released scheme for the following cars, 8k miles, insured, maintained over 3 years would cost me as a 40% tax payer for. The sacrifice the employee makes out of gross salary is 726 which, after tax, is equivalent to paying 435. At loveelectric, we simply charge a small commission against the P11D value of the car (youll never pay more than 1.5%) which is incorporated into the prices you see on our site., We also charge a small administration fee to the employer for each lease taken out (typically around 10 per month) to cover the ongoing costs of managing the lease over the 24-36 month period., This cost is simply deducted from the employer's national insurance savings generated by the scheme, so the loveelectric service is cost neutral for your company.. 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. Perhaps a concrete example would make this clearer. Insurance is an essential part of keeping your car on the road. 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. Our registered address is UK House, 5th Floor, 164-182 Oxford Street, London, W1D 1NN. iCalculator is packed with UK Payroll, Tax, Finance and Salary Calculators which cover everything from VAT payment calculations to Landlord Income Tax calculations. The No. Authority, firm reference number 809736, company number 10754317. Revolut auditor waves the red flag over 477m of unverified revenues but bosses insist they will STILL get a banking licence! 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. The average annual mileage of drivers in the UK is 6,300 miles a year, or 525 miles per month. Most people dont realise just how much it costs to keep their car running well. Leases are 24-48 months contracts for new cars. None require an upfront deposit from an employer or employee. To calculate your BiK rate you need three numbers: P11D value of the car x BiK tax band x your income tax bracket. You get taxed a small amount for the benefit of having the car, whilst making other savings on Income Tax and National Insurance. 17 min read. 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. 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. We'll install your home charger. That helps us fund This Is Money, and keep it free to use. 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. For the Tesla. This works when an employer and employee come to an agreement over salary. It simply means their rental prices cannot match the ones of large leasing companies. Fixed AmountPercentage of Salary. Whos Tusker good for? Go To Calculator. Because electric cars produce zero emissions theres no road tax to pay. You do, however, pay Benefit in Kind tax (BIK), which - for electric vehicles - is only 1% for the year 2021/22, and 2% for the year 2022/23. Most have early termination protection (but each one will include different terms, so make sure to ask). 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. It's also 100% anonymous, in case you were wondering. and provides a breakdown of your annual salary with Monthly, Quarterly Weekly, Daily and Hourly pay illustrations. This is Money is part of the Daily Mail, Mail on Sunday & Metro media group. 2. Our tax calculators are designed to make it easy for you to understand how much you pay and how your money is divided up. Electric car drivers can take advantage of cheap, 100% renewable energy overnight with the Intelligent Octopus EV tariff from Octopus Energy. Some employers choose not to include insurance, but its up to your company. Filter. It is simple to follow and shows how you can benefit from doing this. Our electric car salary sacrifice scheme is free for employers to join and can be set up within just a couple of weeks. Will employees get their questions answered quickly. Published: 07:45 GMT, 8 April 2021 | Updated: 07:45 GMT, 8 April 2021. 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.. Please read the important notes before proceeding to use this tool: By comparison, combustion vehicles are subject to a typical BIK tax of 25 to 35 per cent. Lets take a comparison of the cost of leasing a Corsa 1.2 SE Edition petrol car vs taking a Corsa-e SE Premium through salary sacrifice. Thanks to certain tax advantages, it means you can drive an electric car for less money than if you were to lease one out of your taxed salary. '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. 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. 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. Huel and Purplebricks are two large firms who have already signed-up, with more than a hundred new enquiries every week according to Octopus, which had Prime Minister Boris Johnson visit its London headquarters late last year. Sorry Scotland. We don't as a general policy investigate the solvency of companies mentioned (how likely they are to go bust), but there is a risk any company can struggle and it's rarely made public until it's too late (see the. Lease prices are higher because they are a leasing company that is considerably smaller than the market leaders and they have a higher cost of capital. You already have all the answers you need." 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. 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. 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. 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. Sign a simple contract to sign up to our free service. 'Salary sacrifice is essentially a zero-cost, zero-effort tool for businesses to fight climate change and save the planet. Call or email us during normal office hours to talk about the specifics of your arrangements. Electric vehicles are also increasing in popularity with March the best single month for sales of new zero-emission electric cars on record, beating last December by less than 100 sales, according to figures fromthe Society of Motor Manufacturers and Traders (SMMT). 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. Octopus may introduce We often link to other websites, but we can't be responsible for their content. Ok this was acceptable. Once you've inputted your company details we'll give you a call to get you set up. There has been a surge in demand for EVs as people become more environmentally conscious. 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. 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. 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. The launch comes as EVs reach a tipping point thanks to falling cost, government incentives and changing attitudes towards zero emission vehicles. 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. Contact us at [email protected] is a trading name of Love Electric Financial Services Limited, a company registered in Scotland, Company Number 374952. A further 20 more models will be available later in 2021. It is often a pension contribution. Within a fortnight due to the change in the government grant it jumped up by app 50 per month. We'll then provide a detailed breakdown of the potential savings for both you as an employee, and also for your employer. However, that means youll want to know how much that commission is. Are they self-insuring, or do they have a legitimate third-party and comprehensive insurance provider? It provides everything businesses and employees need to go electric in one place including EVs, home and workplace chargers, smart energy tariffs to keep bills low, and impartial expert advice on going electric. Find out how. Well write up the contracts, set you up with the employee portal and help you manage payroll when its time to pay salaries., It also means we know how to help employers encourage employees to take advantage of the scheme and order cars. Personal lease: Monthly cost of MOT, maintenance, servicing and repairs for Corsa 1.2 SE Edition = 22.50. 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. Wales. This website uses the TMDb API but is not endorsed or certified by TMDb. Salary sacrifice is an employee benefits scheme that allows you to pay for a car out of your gross monthly pay. 1 Home Entertainment Tech Resource. Early termination only covers 10% of claims or ten cars - whichever is greatest. 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. Octopus At home charger and installation is included in the lease cost. Octopus Electric Vehicles - electric vehicle leasing for personal, business and salary sacrifice including charging and cheap renewable electricity. Body type. ), 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. Maintenance and insurance can optionally be added. 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. Were about to show you how you can get your hands on an electric car that will cost you less each month than a petrol 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. Any prices quoted are subject to changes in law, regulation, tax or duty beyond our reasonable control. The BiK rates are calculated based on the cars CO2 emissions. AVForums.com is owned and operated by M2N Limited, Make. Electric charge point and installation are also optional. Ideally, they arent spending hours trying to order a car, and the experience is relatively intuitive. If they've not signed up yet, send them our way. Making Tax Calculations Simple. Copyright 2021 loveelectric. Employers and employees who want everything bundled together and include a charging solution and home energy tarriff. Copyright 2000-2023 M2N Limited E. & O.E.