Salary sacrifice tax implications on an electric company car?

chrissyboy82

Hi there,
I am currently employed and I'm looking at getting a fully electric car leased through the company I am working for. From my understanding the monthly payments for the car will be deducted from my salary before tax; therefore this sounds very attractive as am I higher tax bracket earner, so I am saving 40% income tax on that monthly payment.
As I am effectively sacrificing part of my salary towards the monthly cost, does this come under the salary sacrifice scheme, or optional renumeration agreement? (I'm not sure what the difference is). 
I am asking this, as when I put my details in the GOV.UK company car tax calculator, if I tick the "is this part of an optional renumeration agreement' box, it then shows that I am taxed 40% on the yearly cost of the car payments. However if I leave the box unticked, it comes up with zero tax? 
It will make a big difference to how much tax I pay so I'm keen to understand this before I commit to the car. I know there is no BIK to pay on an electric car, but I'm unsure how the salary sacrifice bit works.
Any help would be really welcome!
Chris.

molerat

Optional remuneration is where they give you a car and you are taxed on that value.  You paying for the lease before tax is salary sacrifice so you save the tax and NI on that amount.  You now need to look up the P11D value of the car to see how much tax you will have to pay on the car value which is set at 0% for 20-21, 1% for 21-22 and 2% for 22-23 so nothing to pay this year and a small amount in the next 2 years.