Electric Car Salary Sacrifice Scheme

thegentleway

My work is doing a scheme to lease a new electric vehicle from NHS Fleet Solution for 2-3 years. I’m only a basic rate tax payer on PAYE so wondering if it’s worth it?

Money_Grabber13579

It can still be worth it because you’ll save 20% tax and 12% NIC and then only pay 2% BIK. But it is more complicated than that because it also depends on the leasing cost and one thing I’ve noticed is that some are more competitive than others. The NHS scheme does seem quite good though.

Grumpy_chap

Will the SS amount impact your pension?

MX5huggy

Pension pension pension.
If in NHS scheme 
Reduce you salary by £400 per month £4800 per year that will reduce your pension payments by £446 (presuming you pay 9.3% contributions) but this reduces your salary so less is added to your pension £88 less (because the accrual rate is 1/54ths of the £4800). Do this for 3 years 3 x £88 = £266 reduction in annual inflation linked pension live for 30 years after retirement you receive £8000 less in total. 

daveyjp

Its probably the cheapest way to be in an EV, but is an EV the most suitable and cost effective solution to your vehicle needs when all costs are taken into account?

As above the impact on pension and redundancy payments from SS arrangements is crucial information for the overall cost calculation.

thegentleway

Grumpy_chap said:

Will the SS amount impact your pension?

No the FAQ says "Only if you are in the NHS pension scheme", which I'm not. I work for a University.

daveyjp said:

Its probably the cheapest way to be in an EV, but is an EV the most suitable and cost effective solution to your vehicle needs when all costs are taken into account?

As above the impact on pension and redundancy payments from SS arrangements is crucial information for the overall cost calculation.

I need to look into this. We have two vehicles and currently do 8k miles in each per year. Unfortunately we've ruled out EVs so far because home charging would be a right faff with our current living arrangements (we don't have a driveway). However, we are (hopefully) moving to a house with a driveway so home charging becomes a viable option.

Pension doesn't get affected but not sure about redundancy: I need to look into that.

Petriix

If you will have home charging then it's a no-brainer. The saving vs petrol (if you can charge entirely on Octopus Go at 7.5p per kWh) will work out at over £2,000 for 8,000 miles. 

thegentleway

Petriix said:

If you will have home charging then it's a no-brainer. The saving vs petrol (if you can charge entirely on Octopus Go at 7.5p per kWh) will work out at over £2,000 for 8,000 miles. 

Wow that's good, only for 4 hours though.

Brie

I ruled it out at my workplace as the scheme couldn't tell me the full cost of the car.  I'd pay X per month for 3 years and then need to pay ???????.  If I'm buying something I want to know how much it costs.

Grumpy_chap

Brie said:

I ruled it out at my workplace as the scheme couldn't tell me the full cost of the car.  I'd pay X per month for 3 years and then need to pay ???????.  If I'm buying something I want to know how much it costs.

Unlike a personal PCP, the car SS schemes are usually true lease where a monthly payment is set to have the use of the car for 3 years after which the car is returned.  The lease company has no obligation to sell to you, though they may agree to do so.  That agreement to sell will usually be at the rate that the lease company set at the time the car is to be returned.

Petriix

thegentleway said:

Petriix said:

If you will have home charging then it's a no-brainer. The saving vs petrol (if you can charge entirely on Octopus Go at 7.5p per kWh) will work out at over £2,000 for 8,000 miles. 

Wow that's good, only for 4 hours though.

4 hours @ 7kW = 28kWh @ 4 miles per kWh = 112 miles; call it 100 miles per night after losses. That could cover 20k miles if spread evenly throughout the working year.