Company car - electric vs diesel
j18psf
Forumite 5 Posts
Evening
I have a query regarding income disparity between colleagues who have either an electric car or a diesel car.
The company I work for are currently switching from diesel to electric and at the moment it is being rolled out with the longest serving staff members getting these cars first, the rollout could take up to 2 years.
I have worked for the company for 10 years and in Feb 2021 I switched into my current role, I signed onto a year 5 contract (highest) due to the role switch. The company are saying that I am one of the last to get the car as I am one of the last to start in the role even though I am one of only a handful on the year 5 contract. I have worked for the company longer than most others in the team.
The issue is that the staff who are getting an electric car first are currently receiving roughly £600 per month extra in their pay due to the tax savings linked to electric vehicles.
Is there anything legally contestable about the wage disparity in this area- or is there a basis for complaint that people in the same role contractually are receiving drastically different pay packages- completely dependant on when the company is able to provide an individual an electric car over a diesel one?
I have a query regarding income disparity between colleagues who have either an electric car or a diesel car.
The company I work for are currently switching from diesel to electric and at the moment it is being rolled out with the longest serving staff members getting these cars first, the rollout could take up to 2 years.
I have worked for the company for 10 years and in Feb 2021 I switched into my current role, I signed onto a year 5 contract (highest) due to the role switch. The company are saying that I am one of the last to get the car as I am one of the last to start in the role even though I am one of only a handful on the year 5 contract. I have worked for the company longer than most others in the team.
The issue is that the staff who are getting an electric car first are currently receiving roughly £600 per month extra in their pay due to the tax savings linked to electric vehicles.
Is there anything legally contestable about the wage disparity in this area- or is there a basis for complaint that people in the same role contractually are receiving drastically different pay packages- completely dependant on when the company is able to provide an individual an electric car over a diesel one?
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Replies
Do you mean your current company car is on a five year contract?
OR do you mean you are on a five year fixed term contract of employment?
Those with the earlier switch to EV are not getting a drastically different pay package.
They are receiving salary package plus company car. It is just the company car being EV results in a lower BIK tax liability so, for the same salary package, the take home pay is then higher.
The difference in take home pay of £600 per month seems rather a lot, but it would depend on what the cars are. As an example for comparison:
- LandRover Disco Sport, about £3k per year tax (basic rate) or £6k per year (higher tax) - that's £250 to £500 per month BIK.
- TESLA Model 3, about £250 to £500 per year on tax BIK.
So, an individual saving £600 per month in BIK tax for a car would have to be higher rate tax payer and a very-much "above-average" diesel car to be gaining to that extent.Ultimately, there seems to be nothing you can do about it. Salary packages can differ and so long as the difference is not because of a protected characteristic that is all acceptable. How do you know whether the person in the next desk earns £10k per year more or less than you do?
Sorry the five year contract refers to the pay grade of the role, with a year 5 being the maximum that you can currently earn in that position. That pay is currently £80k.
Those of us who have a diesel car also get fuel covered for business and private use so the £600 saving for the electric vehicle also includes that, those with electric also get a card to cover charging and their home charging usage paid too.
I know what my colleagues are getting paid as it has been openly discussed what the electric vehicle costs vs diesel.
I was just curious as technically one of my colleagues who is on a lower annual salary than me could be getting more per month after tax due to the BIK from the electric vehicle and that just seems rather unfair.
You could ask them why it's going to take so long .
But in the meantime, it may just be my naivete but I think, in these times of austerity and energy crises, that you really have it good.
Your salary is £80k p.a. You have a company car - albeit diesel rather than electric. Even so, I think you're sitting pretty especially as your employer pays for all your fuel. There aren't many people around these days who are enjoying such salaries and perks.
In fact, I watched the One Show on the Beeb today where there were discussions about schoolchildren in Britain in the 21st century whose parents can't afford to feed them so schools were attempting to step up.
It seems to put things into perspective a little. I don't think you should be upset, you really do have a great job with fabulous perks. You've obviously worked hard for the rewards you have.
You could make complaints of course but it would make more sense to speak to management and ask them the questions you've asked here. Only they know the answers.
@MalMonroe I know I am in a great position and I am grateful with what I have, 10years ago i started in an entry level position so I have worked hard to get where I am.
Thanks again
A fuel paid company car is a great perk, even with the tax penalty. Just wait till you finish and have to fund your own!
Just think, when it's your turn for the EV, you'll get better technology!
Safe driving