Here's an example:
Let's say you're earning £50,000 a year and decide to participate in a salary sacrifice scheme on a £30,000 electric car for three years. Over the course of the three years, your salary would decrease by £10,000 per year.
Pre-salary sacrifice tax - £50,000 x 0.20 (20% tax rate) = £10,000 income tax.
Post salary sacrifice tax - £40,000 x 0.20 (20% tax rate) = £8,000 income tax.
You're saving £2,000 on income tax while also getting an electric lease car.
National Insurance is similar to income tax in that it's calculated based on your gross monthly salary. So, as your gross monthly salary decreases, so does the amount of National Insurance you pay.
For more information about the finances related to electric car leasing through salary sacrifice, check out our blog Understanding the Financial Implications of Salary Sacrifice.
Access to Electric Vehicles:
As well as increased tax savings, you'll get access to brand-new electric cars every two, three, or four years. This will not only look good but will save you money in the long term, with electric vehicles being cheaper to run.
Leasing an electric car through salary sacrifice provides you with a car that's environmentally friendly. Electric cars don't produce any tailpipe emissions and help contribute to reversing the effects of climate change.
You also won't have to worry about congestion charges like the ULEZ Zone in London, as electric vehicles are excluded from the charges.