Electric vehicle (EV) leasing sales have increased by 91% in the past six months thanks to the introduction of the 0% Benefit in Kind tax.
In April 2020, the government eliminated Benefit in Kind (BIK) tax for EV purchases, this means that leasing an EV through a workplace salary is essentially tax-free. Previously, a 16% BIK tax was applied to any vehicle when purchased through a company.
Combustion vehicles are still subject to an average 27% BIK tax when using salary sacrifice, therefore purchasing an EV through a company is now a much more attractive option.
Workplace salary sacrifice schemes enable employees to pay for vehicles from their gross salary, saving on both national insurance and income tax.
To help businesses, workplaces and employees to benefit from the new tax break, Octopus Electric Vehicles have launched a 100% electric salary sacrifice scheme.
The scheme handles all of the administration on behalf of participating companies and provides ongoing expert aftercare for employers and drivers themselves.
Thanks to this scheme, a higher rate taxpayer can currently lease a Tesla Model 3 Standard Range Plus for 48 months for an average of £342 a month with zero upfront cost, including insurance, all servicing & maintenance, and even tyre replacement.
Fiona Howarth, CEO of Octopus Electric Vehicles, said: ‘The Impact of the last six months has been staggering. Changes to Benefit in Kind tax have been a financial game-changer for EV leasing.
‘Add this to brilliant electric cars hitting the market and huge savings on running costs versus petrol cars, and EV’s are a total no brainer. It’s no wonder then that we are seeing a huge boom, with the number of companies ordering EVs via our salary sacrifice scheme growing five-fold since April.’
Steve Smith, an Octopus Electric Vehicles customer who took advantage of the scheme commented: ‘I’ve long been interested in EVs, but only just convinced my boss about the Salary Sacrifice scheme, which has allowed me to buy a Tesla Model 3.
‘The savings from the scheme and the 0% tax mean the cost of my car and electricity is far less than I was paying for my old diesel car and fuel. I’ve already recommended the scheme to colleagues, who have been blown away by the car and the money I’ve saved.’
Photo Credit – Pixabay