Salary Sacrifice – Electric Savings - PKF Francis Clark
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Salary Sacrifice – Electric Savings

Electric Car ChargingAhead of a significant overhaul to the company car benefit in kind charges from April 2020, PKF Francis Clark has been trialling a new electric car salary sacrifice scheme. By taking advantage of the reduced 2% benefit in kind rate for fully electric cars (from 6 April 2020), and the continuing ability to provide a low emitting company car under a salary sacrifice arrangement, there are significant savings to be had for both employer and employees.

For employees, they are provided with a brand new company car, and they benefit from reduced tax and NIC costs. There can be further savings available, subject to the personal circumstances of the employees, for example, lower student loan repayments or a reduction in the amount of child benefit higher rate clawback.

For employers, there are both financial and commercial advantages to introducing a low emission company car salary sacrifice. These schemes allow a significant reduction in employer NIC costs, a reduction in the apprenticeship levy costs and significantly lower business mileage expense claims. Introducing a low emission car policy will help employers reduce their carbon footprint and in our experience, employers who offer wider benefit packages to employees, see improved staff satisfaction and staff retention levels.

Separately, HMRC has also announced a removal to the £1,000 cap on cycle to work salary sacrifice schemes, providing a greater choice of cycles employees can opt for under the scheme and, in turn, further tax savings for both the employee and employer.

For further information, please contact Steve Ashworth (employment tax director) :

E: [email protected]
T: 0117 403 9800

FEATURING: Steve Ashworth
Before joining the Bristol office of PKF Francis Clark in July 2019, Steve started his career at HMRC over 30 years ago and then spent… read more
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