Glossary · UK
What is EV Salary Sacrifice Scheme?
An employee benefit where salary is exchanged for a leased electric car, reducing tax and NI.
Full Definition
An EV salary sacrifice scheme lets an employee give up part of their gross salary in exchange for the use of a fully electric company car, usually leased by the employer through a specialist provider. Because the exchanged salary avoids Income Tax and National Insurance, and electric cars attract a low Benefit-in-Kind tax rate compared with petrol or diesel models, the scheme can make driving a new EV substantially cheaper than a personal lease funded from net pay — though giving up salary can also affect mortgage applications, pension contributions if based on gross pay, and other salary-linked entitlements.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.