{"id":26641,"date":"2024-05-10T14:10:07","date_gmt":"2024-05-10T13:10:07","guid":{"rendered":"https:\/\/smh.group\/?p=26641"},"modified":"2024-05-10T14:10:07","modified_gmt":"2024-05-10T13:10:07","slug":"how-an-electric-car-can-boost-your-income-with-a-salary-sacrifice-scheme","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/how-an-electric-car-can-boost-your-income-with-a-salary-sacrifice-scheme\/","title":{"rendered":"How an electric car can boost your income with a salary sacrifice scheme"},"content":{"rendered":"

It may seem counter-intuitive, but accepting a lower salary in exchange for a salary sacrifice scheme that includes an electric car can actually increase your net income due to savings on tax and national insurance contributions (NIC).<\/strong><\/p>\n

Salary sacrifice<\/strong><\/h3>\n

Despite the recent introduction of the Government\u2019s zero emission vehicle mandate, the number of electric car sales seems to have stalled recently.<\/p>\n

Electric cars work well as part of a salary sacrifice scheme because the taxable benefit for employees is low. It is calculated as just 2% of the car\u2019s list price. This percentage is to increase by 1% for each of the next three tax years but will still be a fairly reasonable 5% by 2027\/28.<\/p>\n

However, it is important to note that while hybrid cars can have the same tax advantage, the electric range for the majority of models is too low to qualify for the 2% rate. The current percentage for most hybrids will be a less attractive 12%.<\/p>\n

High marginal tax rates<\/strong><\/h3>\n

With tax thresholds frozen, more and more employees are facing higher marginal tax rates. In particular, a rate of 60% applies on income between \u00a3100,000 and \u00a3125,140 due to the withdrawal of the personal allowance:<\/p>\n