Car tax changes lead to 62 percent rise in interest as updates seen as ‘morale boost’
Car tax updates to the benefit in kind rates have seen a 62 percent increase in people interested in salary sacrifice schemes. Fiona Howarth, CEO of Octopus Electric Vehicles confirmed the tax changes were encouraging employers to explore what benefits could be available to those while under lockdown.
Speaking to Express.co.uk, Ms Howarth said: “We have seen 62 percent increase in people interested in salary sacrifice in the last three weeks compared to the initial weeks of lockdown, as the company car tax rate for electric cars has dropped to zero, combined with an increasing focus on air quality.”
The electric car expert claimed salary sacrifice schemes were being increasingly encouraged by employers as a morale boost.
Employees are seeing it as a benefit due to the positive effect the changes may have on decreasing running costs.
This is because there is no cost to businesses straight away and is seen as a low risk incentive for workers.
READ MORE: How can motorists secure benefit in kind changes?
Ms Howarth said: “Despite these unprecedented times, businesses are seeing the Go Green Car Scheme for their employees as a great morale boost from a benefits point of view.
“Giving them the most affordable opportunity to go green and work towards extending the positive effects that limited transport has had on air pollution levels.
“For the employees, additional protection of being able to hand the car back if made redundant, maternity and paternity payment holiday options, as well as up to 40 percent savings makes this a great time to switch to electric.”
Car tax updates have seen upfront prices slashed on some of the UK’s most popular electric cars such as the Tesla Model 3.
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The vehicle can be fully charged for less than £3 and has a real world range of 230 miles on electric power.
Benefit in kind rate changes have seen costs slashed by 42 percent for the popular electric supercar with total prices now around £300 per month when ordered on a 48 month contract.
City runarounds such as the Rrenaut ZOE were also available for under £200 per month under a salary sacrifice scheme.
Car tax updates introduced at the start of April slashed benefit in kind rates for fully-electric cars from 16 percent to zero.
These charges will rise to one percent in 2021 and then to two percent by 2022 where it will be frozen for a further two years.
The changes were introduced to ensure upfront costs for electric vehicles were brought back into line with traditional petrol and diesel cars.
Octopus Electric Vehicles has previously claimed companies have approached them for help in setting up a salary sacrifice scheme.
The group has previously claimed employees can save up to £7,000 by simply signing up to the scheme.
This is for savings over a four-year period on common running costs such as road tax and maintenance which can be costly for traditional vehicles.
The group claims motorists can enjoy 90 percent savings by topping up their car with electricity rather than petrol and diesel.
A survey conducted by DriveElectric revealed eight of ten business people would be likely to purchase an electric car under the policy.
In further tax breaks revealed in April, owners of expensive electric cars will now also be exempt from any charges.
The £320 charges which used to apply to electric cars valued at £40,000 or more has been axed in the updates.
Published at Fri, 24 Apr 2020 05:01:00 +0000