The growth in salary sacrifice and how it can help drive the adoption of electric vehicles (EVs) was examined at this year’s Fleet & Mobility Live.

Simon Down and Alex Marks, both associate directors on the car consulting team at Deloitte, looked at the way company car benefits are changing.

Their salary sacrifice back to basics presentation, which was repeated on each day of the show, showed how the funding mechanism has become transformational in opening access to more drivers to make the switch to EVs.

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Salary sacrifice had been declining in popularity since 2017 when the Government introduced the optional remuneration arrangements (OpRA) legislation, which effectively removed its tax and NI efficiency as it meant an employee would be taxed on the greater of the value of the benefit or the salary they gave up.

However, an exemption for vehicles with 75g/km of CO2 or less has made salary sacrifice an attractive proposition again for drivers looking to reduce their benefit-in-kind company car tax rates.

Benefits to an employee include saving tax and/or Class 1 (Primary NIC), access to corporate discounts and, in some cases, the ability to unlock additional employer funding.

Employers can save Class 1 (Primary) NIC and reinvest these savings into areas such as employee benefits or green initiatives, while offering salary sacrifice can also improve staff recruitment and retention.

Down said: “We offer it at Deloitte and it's something that we as a firm are actually looking to push in terms to generate some savings for the business.”

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