Car Leasing Salary Sacrifice

Question - Our company has a threshold for monthly EV lease payments that the company will pay. We have an employee wanting a more expensive vehicle and willing to contribute to the difference. Can the EV leasing difference be set up as an employee salary sacrifice. Or does our employee have to repay us from his net pay?

Hi ,
 

It can be set up as a salary sacrifice however it would not reduce the value of the benefit as it is not taxed, therefore the employer will still pay tax on the full value of the benefit. If they pay from their net pay then this will go under capital contribution in the P11d calc and therefore reduce the value of the benefit.

Thank you .

Hi, One of our employees had privately taken out an EV lease. If we are to offer salary sacrifice benefits on that vehicle, could the employee expense the monthly lease and insurance costs for us to reimburse, and then we deduct that cost from their monthly gross salary for tax & NIC reduction benefit? How would we then calculate the deductible BiK tax, if applicable?

Hi Cameron,
When you do a salary sacrifice the employee gives up the money, it then becomes the business' money.
Therefore the lease would need to be in the business' name.
Salary sacrifice for employers
Thank you.