Can a small business still benefit from an EV Salary Sacrifice Scheme?

Small business might assume that salary sacrifice schems for electric vehicles are only for large companies ... but that doesn't have to be the case - quite the opposite!

How it works for small businesses 

A salary sacrifice scheme in a small business works in exactly the same way as in a larger business - an employee gets to lease an electric vehicle by sacrificing a portion of their pre-tex salary. 

it is operated through PAYE payroll, no set up fees, capital outlay or ongoing cost - and it only takes a minimal amount of admin each month - the only difference is this happens on a much smaller scale so many of the larger salary sacrifice scheme providers won't be interested as not enought employees will take up the benefit to make it worthwhile for them. 

A smaller independent provider however will have the appetite for smaller schemes and the resources to ensure it is properly set up and communicated to all qualifying employees in the business. 

If you're considering an electric car scheme for the first time, here's our Salary Sacrifice overview - explaining what it is ... who it suits and detailed guides for both employers and employees 

Talent acquistion and retention

Retaining existing staff and avoiding the cost of recruiting replacement staff is more important to a smaller business - there are fewer employees therefore each one has a bigger individual impact on the business. 

Attracting the right talent quickly and efficiently also has a big impact on a smaller business as the more talented recruits can become productive more quickly. 

A salary sacrifice scheme is great tool to improve staff benefits for existing employees - and make a small business more attractive to potential new recruits. 

Cost neutral to the business 

The cost of the lease is fully reimbursed by the employee - and because their gross salary is reduced the company makes savings on Class 1 NIC which can either be passed fully onto to the employee or in part to cover the small amount of administration each month for the payroll 

ESG Credentials and Scope 3 Emissions

Demonstrating sustainability and reducing environmental impact is not just for large companies - we can all play our part and by encouraging and making it easier for employees to switch to electric vehicles for their commute to work will reduce the businesses Scope 3 emissions - for many companies working in the public sector, construction or the NHS providing demonstrable proof of sustainability practices and emissions reduction is becoming part of tender submissions. 

Grey fleet and cash allowance challenges 

Many smaller business have relied on employees using their own vehicle on ocassions [ grey fleet ] to avoid the outlay of company vehicles, or provide a cash allowance to enable employees to purchase their own vehicles with company funded assistance. 

These vehicles will be older and more polluting than a brand new electric vehicle, whereas an EV salary sacrifice scheme can make such arrangements cleaner, greener and more cost-effective. 

• Improved vehicle availability and choice for those employees who aren't allocated a company car 
• Newer, safer vehicles on the road, reducing risk and instances of breakdowns. 
• Cost reduction through lower private mileage reimbursement costs - HMRC approved mileage rates for employees using their own vehicle for business journeys is 45p per mile - in comparison to just 7p per mile fuel reimbursement for a company car [ a salary sacrifice vehicle is deemed a company car ] 

The combination of all three of the above factors has a significant impact to a smaller business - even if only a handful of employees take up the scheme 

Want to read more? 

• More than a benefit: Why EV Salary Sacrifice is more than just an employee perk

• SME Elegibility: Can a small busines offer and EV Salary Sacrifice scheme to their employees? 

• Low uptake: Got a scheme already ? ... how to understand and fix low employee uptake

• BIK changes: Is salary sacrifice still worth it with the upcoming changes in BIK rates for EVs?

Further considerations 

Salary sacrifice doesn't suit every business and a quick conversation with a smaller independent provider like NEV Leasing will help you decide if your company can benefit. 

• Employee turnover: if your business has a higher than average turnover of staff or significant seasonal variations then salary sacrifice may not be for all employee grades or departments. Levels of protection for early terminations due to staff leaving can be built in by the provider. 
• Minimum wage compliance: The amount sacrificed must still ensure the individual remains above the minimum wage after the sacrifice - a quick rule of thumb means that employees need to earning a minimum of c£30k to avoid falling below minimum wage 
• Clear communications and updates: Check with your provider about the onbaording process - how the scheme and benefits are communicated to employees and what updates are provided to keep them well informed and the scheme in consideration. 

Want to see what Salary 

Conclusion

A small business can most definitely still benefit from implementing a salary sacrifice scheme for electric vehicles - providing they approach an appropriate salary sacrifice provider who support smaller businesses proactively. 

The nature of a small business makes them a great base for a salary sacrifice scheme as they generally communicate with employees quicker and more often - increasing the likely penetration of a scheme. 

Additionally, becuase they are smaller, any individual taking up the scheme has a bigger impact - both personally more than likely on the business - if anything therefore a smaller business is likely to benefit even more than a large corporate. 

NEV Leasing specialise in creating and implementing schemes for smaller businesses across Essex, Suffolk and Norfolk - even if only one or two employees are showing an interest at the outset. Schemes, communications and ongoing support is designed to suit your business with no one size fits all ... and becuase we are on your doorstep we are on hand for in person awareness and information sessions. 

For more details on how Salary Sacrifice can benefit your business  head over to our salary sacrifice portal - alternatively for more information call us on 01206 585837 ... email getintouch@nevleasing.com or complete the short form below and we'll be in touch 

Want to see the offers and savings for yourself ? ... It's easy to access and register to our Salary Sacrifice Portal - enter the company ID:  0Me6YRGroE  and then add your personal details to gain immediate access to the live portal