Salary sacrifice leasing

[ITR1]

Hi, I'm new to the idea of salsac EV leasing and have a few questions:

Can anyone suggest a Salsac scheme for a small employer (<15 employees)?

Is it easy for an employer to pass on the NICs savings?

Some of the posts above show the net costs as being what some providers gross costs almost seem to be. I've been looking at loveelectric as an example. Do the schemes vary massively?

Thanks in advance

[Secret lemonade drinker]

Passing on the savings is easy. If your company chooses not to pass it on, it’s profiteering at your expense

[Gone fishing]

ITR1 said:

Hi, I'm new to the idea of salsac EV leasing and have a few questions:

Can anyone suggest a Salsac scheme for a small employer (<15 employees)?

Is it easy for an employer to pass on the NICs savings?

Some of the posts above show the net costs as being what some providers gross costs almost seem to be. I've been looking at loveelectric as an example. Do the schemes vary massively?

Thanks in advance

The company is adding additional administrative expenses and if you decide to pass on the NI savings the company makes, you are giving a pay rise. What happens if not everyone takes out a SS car, only some get the rise? and what happens if somebody does take get a car, then at the end decides not to take another one, what do you do about the extra you’ve been paying them? Do they have a pay cut, because that’s what it becomes? One solution might be to add an employee contribution to the scheme, but does that become a benefit and how is that recorded on employees P11D? Do you currently need to issue P11Ds to employees because you now will.

You also need to think about employees leaving mid term and leaving the company with the liability for the car, or worse the company needs to make some redundancies. The providers can provide cover for that but it’s not cheap and is one of the extra costs that make these schemes gross price significantly higher than leasing a car personally. Alternatively you can change employment contracts making employees liable for say 12 monthly payments should they resign, but that could still leave a liability and there’s tax implications to work through.

I’m not saying it’s not worth it, just there are some potential pitfalls that need to be managed

[Zigster]

Gone fishing said:

The company is adding additional administrative expenses and if you decide to pass on the NI savings the company makes, you are giving a pay rise. What happens if not everyone takes out a SS car, only some get the rise? and what happens if somebody does take get a car, then at the end decides not to take another one, what do you do about the extra you’ve been paying them? Do they have a pay cut, because that’s what it becomes? One solution might be to add an employee contribution to the scheme, but does that become a benefit and how is that recorded on employees P11D? Do you currently need to issue P11Ds to employees because you now will.

You also need to think about employees leaving mid term and leaving the company with the liability for the car, or worse the company needs to make some redundancies. The providers can provide cover for that but it’s not cheap and is one of the extra costs that make these schemes gross price significantly higher than leasing a car personally. Alternatively you can change employment contracts making employees liable for say 12 monthly payments should they resign, but that could still leave a liability and there’s tax implications to work through.

I’m not saying it’s not worth it, just there are some potential pitfalls that need to be managed

Salary sacrifice will lead to a BIK regardless of any employee contribution. It’s a pretty small BIK at the moment for EVs (which is why salary sacrifice EVs have taken off in the past few years) but it still exists.

Passing on the employer NI savings would be done by reducing the lease cost rather than adding extra to an employee’s post salary sacrifice cash pay. For me, it’s shown on the monthly price of the EV as an “employer contribution”.

Redundancy/leaving issues a good point. That’s why my employer has only just introduced a scheme since we were bought earlier this year by a much bigger company, and why my wife’s company won’t introduce one.

[z4RRSchris]

At ours we extend your notice period so that you cant leave on your own accord within 6 months of getting a car, and after that we have an insurance policy to cover it and your notice flips back to normal.

as you say works out a big extra cost, but protects small companies.

[Basil Brush]

SWoll said:

The cost depends on what you are earning as the tax saving can be huge, a lease will be the same price for everyone . Also includes insurance/maintenance, isn't finance that's associated with you personally and is something you can walk away from if you change jobs/get made redundant etc so considerably lower risk than a personal lease.

As an example

Personal Lease



SS for someone earning £125k a year.

Edited by SWoll on Saturday 28th October 08:52

Which provider are your SS values from?

[ITR1]

Thanks for the replies. I don't see passing on employer NICs as a pay rise, as the employee is surrendering their entitlement to £X year in salary which in turn saves the company money. It sounds like the easiest way to capture this is to adjust the monthly sacrificed amount to offset some or all of the employer's NICs saving.

I wonder if there is a standalone insurance product which could be bought to cover any lease costs in the event of termination. A quick google doesn't throw anything up but I'll keep looking.

I think we'll have maybe 2 people max be interested in an EV salsac so my concern was finding a provider who would do it but I guess one way to find out is to contact some.

[SWoll]

ITR1 said:

Thanks for the replies. I don't see passing on employer NICs as a pay rise, as the employee is surrendering their entitlement to £X year in salary which in turn saves the company money. It sounds like the easiest way to capture this is to adjust the monthly sacrificed amount to offset some or all of the employer's NICs saving.

I wonder if there is a standalone insurance product which could be bought to cover any lease costs in the event of termination. A quick google doesn't throw anything up but I'll keep looking.

I think we'll have maybe 2 people max be interested in an EV salsac so my concern was finding a provider who would do it but I guess one way to find out is to contact some.

The insurance coverage etc. will all be part of the SS scheme. The level of risk the employer is willing to accept, and how it's passed on to the employee, will affect the overall cost of each car in the scheme. This is the reason it's more expensive than a personal lease from a gross perspective as with that product you aren't walking away 6 months into a 3 year term without a huge financial penalty and the finance itself is tied to you personally, not the business.

[SWoll]

Basil Brush said:

Which provider are your SS values from?

https://cbvc-salsac.comcar.co.uk/

[Basil Brush]

SWoll said:

Sheepshanks said:

SWoll said:

If they offered both I'd take the SS car without question as huge savings to be had.

It usually seems to be pitched so it’s just slightly cheaper than a personal lease - someone else is pocketing most of the tax and NI savings.

The cost depends on what you are earning as the tax saving can be huge, a lease will be the same price for everyone . Also includes insurance/maintenance, isn't finance that's associated with you personally and is something you can walk away from if you change jobs/get made redundant etc so considerably lower risk than a personal lease.

As an example

Personal Lease



SS for someone earning £125k a year.

Edited by SWoll on Saturday 28th October 08:52

For a real world SS equivalent, that car is £2600 gross pm on our scheme incl insurance etc.

[SWoll]

Basil Brush said:

For a real world SS equivalent, that car is £2600 gross pm on our scheme incl insurance etc.

That is a real world example apparently.

Schemes are all incredibly variable and will be affected by a number of factors. If I add few things on the site I linked (charger, increased insurance cost etc.) the price will get closer to your example. You then need to consider the additional insurance for termination risk that schemes will add at different levels.

At the end of the day a personal lease on that car with those terms can be had for <£1800 so an additional £800 (or almost 50%) a month is quite a premium.

[zed0070]

CraigInnes said:

I’ve just signed up for a soon to be arriving iX1 M Sport in mineral white.
Cost through Tusker is £365 a month although that doesn’t consider that my personal allowance will be reduced by less so my saving will be higher and net cost less.

Edited by CraigInnes on Saturday 28th October 15:49

Edited by CraigInnes on Saturday 28th October 16:10

Wow £365 a month is pretty good
I've got the iX1 M sport tech + in mineral white through SS with Octopus coming soon as well but mines is about £560 a month for 2 years

[zed0070]

Silenoz said:

Order now confirmed by Tusker and indicated delivery date of early January. Starting to get excited.

That's good news mate, did you order the iX1?

[Evanivitch]

ITR1 said:

Hi, I'm new to the idea of salsac EV leasing and have a few questions:

Can anyone suggest a Salsac scheme for a small employer (<15 employees)?

Is it easy for an employer to pass on the NICs savings?

Some of the posts above show the net costs as being what some providers gross costs almost seem to be. I've been looking at loveelectric as an example. Do the schemes vary massively?

Thanks in advance

Octopus seemed pretty helpful with my employer.

[SWoll]

zed0070 said:

CraigInnes said:

I’ve just signed up for a soon to be arriving iX1 M Sport in mineral white.
Cost through Tusker is £365 a month although that doesn’t consider that my personal allowance will be reduced by less so my saving will be higher and net cost less.

Edited by CraigInnes on Saturday 28th October 15:49

Edited by CraigInnes on Saturday 28th October 16:10

Wow £365 a month is pretty good
I've got the iX1 M sport tech + in mineral white through SS with Octopus coming soon as well but mines is about £560 a month for 2 years

2 years will always be more expensive and your salary will hugely affect the net cost.

[CheesecakeRunner]

z4RRSchris said:

At ours we extend your notice period so that you cant leave on your own accord within 6 months of getting a car, and after that we have an insurance policy to cover it and your notice flips back to normal.

as you say works out a big extra cost, but protects small companies.

I work for a big company, and on our scheme, if you leave in the first year of your lease, you have to pay an exit fee equivalent to three months lease costs. Second year, two months. Third year, or any years thereafter, one month.

[Shackattack123]

For those who have ordered these cars over the past year or so and now had them delivered, how did the lead times document stack up with the actual delivery date?

On ours we have Teslas at 8 weeks, EQC at 3 weeks (surely a typo), others at 6 months etc

Is it usually pretty accurate?

[Adam1980]

Apparently we get the full details of our new scheme next month for a launch in Jan.

Octopus a the provider.

[zed0070]

I've just realised our company want a deposit of about 5 months as its >£500 so that's around £2750, which you get all back if you haven't broken any rules!!

If you also leave during the lease agreement I would be liable to pay an early termination fee, which is calculating how many months left on the lease * monthly lease amount /2

That seems quite a lot if someone was to leave the company after 12 months or so.

I'm in 2 minds now

[zed0070]

SWoll said:

2 years will always be more expensive and your salary will hugely affect the net cost.

The 3 year one only worked out £5 cheaper per month.