EVs on salary sacrifice – everything you need to know

In recent years, car salary sacrifice schemes have been gaining popularity across the UK. Many employers offer salary sacrifice schemes that enable their employees to get into an EV in a more tax-efficient way.

Here we explain how salary schemes work, their benefits and explore whether or not they’re right for you.

• What is a salary sacrifice scheme for company cars?
• How does salary sacrifice work?
• What are the benefits of a salary sacrifice scheme for an employee?
• What are the benefits of a salary sacrifice scheme for an employer?
• Are there any restrictions on a salary sacrifice scheme?
• Will salary sacrifice affect any of my other benefits such as a pension?

What is a salary sacrifice scheme for company cars?

A salary sacrifice scheme (sometimes referred to as ‘sal sac’) for cars is an affordable way for employees to drive a car, giving them greater access to EVs. In effect, the schemes are business contract hire schemes for individuals between the agreement, the policy, the employer and the employee.

Similar to a contract hire scheme, the package comes insurance, MOT, servicing, breakdown cover, road fund licence, replacement tyres and routine maintenance all included.

How does salary sacrifice work?

Here’s the clever bit. Traditional company car leasing payments are taken from an employee’s net income after they have paid tax. With salary sacrifice however, the payments are taken from their gross income before tax. By sacrificing part of your gross salary, an employee will pay less tax than a traditional company car, therefore having more disposable income.

You do still have to pay company car tax when on salary sacrifice however.

What are the benefits of a salary sacrifice scheme for an employee?

The fixed monthly cost of leasing a car allows for greater planning, whilst all logistical aspects of the scheme are handled by the employer, making salary sacrifice a more convenient option for many.

Employees also gain access to new cars and electric vehicles, allowing them to drive an EV whilst avoiding any upfront costs.

What are the benefits of a salary sacrifice scheme for an employer?

Businesses benefit from providing greater benefits for their employees as it enables them to attract and retain highly skilled workers. A survey completed by Octopus found that 59% of employees are more likely to join or stay with an organisation if they offer a comprehensive benefits package.

Employers also face a reduction in their National Insurance contributions, allowing them, as well as their employees, to save on their costs.

Are there any restrictions on a salary sacrifice scheme?

There are few restrictions in joining a salary sacrifice scheme. As long as the reduction in income will not cause an employee’s salary to fall below the National Living Wage, anybody is entitled to join, provided it is offered by their employer. The government even encourages the scheme to increase the usage of electric and hybrid vehicles. There can sometimes be an age restriction on certain cars based on the insurance cost.

Will salary sacrifice affect any of my other benefits such as a pension?

Most employers base pension calculations upon notional salaries, which is the amount of income received before salary sacrifices are made. However, some employers may choose to base pension contributions on an employee’s post-salary sacrifice, reducing the overall amount of money added to a pension.

If a pension is based on an employee’s final salary or average career salary, it can also result in a reduced pension payout. Be sure to speak to your employer to understand the specific rules of your pension scheme.

You can also consult a financial advisor to evaluate the effect of salary sacrifice on your pension and discuss ways to mitigate any negative effects.

*Total potential savings estimated to be £1,185. This is calculated using an average driving efficiency of 3.5 miles/kWh and annual mileage of 8,292 miles. Savings compares a smart (home) charging rate of £0.07 per kWh (May 2024 Ovo Anytime tariff) with a slow/fast rapid rate of £0.57 per kWh (ZapMap Price Index April 2024).

Electricity tariffs have changed a lot in recent years. Tariffs might have become more complex and more varied, but the good news is that with a little bit of knowledge they’re easy to understand for EV drivers and you could save a lot of money.

Here we explain what dynamic electricity tariffs are, how they work and how they might work for you.

• Do I have to have a special electricity tariff if I drive an EV?
• What are off-peak electricity tariffs?
• What are dynamic electricity tariffs and how do they work?
• Should I switch to a dynamic electricity tariff?

Do I have to have a special electricity tariff if I drive an EV?

Absolutely not. Just because you drive an EV, it doesn’t mean you have to switch your home electricity tariff at all. Nobody is going to force you to switch your home electricity tariff, but it could save you money and help to reduce the running costs of your car, so why wouldn’t you?

What are off-peak electricity tariffs?

Off-peak electricity tariffs have been around for many years. Some might remember the old Economy 7 tariffs which, as their name suggested, gave customers seven hours of cheap electricity overnight.

The current off-peak electricity tariffs are effectively the same thing as those Economy 7 tariffs, just under a different name. They give you a cheaper rate of electricity over a set period of time, often overnight, when fewer people are using electricity. So you can set your car to charge during those times, using the Ohme app, when the price of your charge will be at the lower rate.

Even better, sometimes these off-peak tariffs can be all of the electricity coming into home, when all of your electricity will be at a reduced rate. So if you can set your washing machine, dishwasher or hot water heating for those hours, it might help you save on your overall household electricity costs as well.

Some off-peak tariffs even have ‘shoulder’ mid-peak periods between the highest and lowest times of cost, giving a more stepped price curve between the peak and off-peak times.

What are dynamic electricity tariffs and how do they work?

On the surface, dynamic electricity tariffs look very similar to the off-peak ones described above. Some companies might even have particular set times when they guarantee those low rates, exactly like those off-peak tariffs.

Where dynamic tariffs go one step further however, is that they enable greater flexibility when it comes to your charging in one form or another. Let’s take the Intelligent Octopus Go tariff as our first example and pretend that you’ve requested a charge via the Ohme app and your car is plugged in at home.

With an off-peak tariff mentioned earlier, the cheaper times for you to charge are within fixed hours.

With Intelligent Octopus Go however, there are guaranteed cheap periods that remain the same for your car charging and home, but there are also bonus cheap slots based on the grid and weather conditions (such as if it’s a particularly sunny or windy day). In that case, if your car is plugged in, Octopus and Ohme’s technology can work together to provide the charge at an earlier time in addition to those guaranteed off-peak hours.

That way, any renewable electricity gets used when it’s available and it alleviates any busier times later in the day during periods of high demand. It also means you can get additional hours of cheap charging and the energy companies can achieve more control on balancing the grid.

An alternative version of a dynamic tariff is offered in the form of OVO’s Charge Anytime add on. Rather than offering set times, this simply guarantees six hours of cheaper charging for your car in each 24 hour period. However, with Charge Anytime this can be at any time of the day and the reduced price of electricity is just that going through your charger, not to your entire home.

These are just two specific examples of dynamic tariffs, but the reality is that they come in many different forms and levels of flexibility. In short, dynamic energy tariffs do exactly what their names suggest; they’re more dynamic and more flexible than traditional off-peak tariffs meaning that your cheap charging times are not just overnight but potentially accessible at different times of the day as well. You also need an Ohme EV charger that can integrate with all dynamic tariffs on the market.

Should I switch to a dynamic electricity tariff?

Switching to a dynamic electricity tariff is obviously down to personal choice. Dynamic tariffs in all their forms will usually be the cheapest and most flexible way to charge your EV at home, helping to reduce your running costs.

Which kind of dynamic tariff will work best for you might also be down to both your average annual mileage and perhaps also how much electricity you use at home. Looking at the cost of your electricity consumption for both your EV and your home should help you to decide which tariff will work best for you.

*Total potential savings estimated to be £1,185. This is calculated using an average driving efficiency of 3.5 miles/kWh and annual mileage of 8,292 miles. Savings compares a smart (home) charging rate of £0.07 per kWh (May 2024 Ovo Anytime tariff) with a slow/fast rapid rate of £0.57 per kWh (ZapMap Price Index April 2024).

Customers who are leasing their first electric car through Motability qualify for an Ohme EV charger and standard installation at no extra cost. However, in some instances there may be some additional work required which isn’t covered by Motability.

Ohme will first provide you with an initial survey. This survey will give you an indication if your installation is standard or needs some additional custom work.

With a custom installation, you will be sent a quote for your approval (and payment) before we start any work.

90% of Motability customers do not incur any additional fees. Most Motability customers who require custom installation pay less than £400.

While a custom installation doesn’t always mean additional costs, here are some examples of some prices you can expect depending on your home.

Longer cable runs and additional trunking (£0-£400)
This is if we need to run over 15 metres of cable or more than 6 metres trunking. Trunking is a plastic enclosure for the cable.

Electrical upgrades (£0-£500)
Some customers may require upgrades to their existing electrics. This could be an upgrade to your fuseboard. If there is no space on your fuseboard you may need a new board.

Loft and underfloor cable runs (£0-£700)
This is if we need to run the cable through your loft or under your floorboards. This includes working at height or where multiple engineers might be required.

Ground works (£750+)
If the cable needs to be run underground or the desired location for the charger is far from your fuseboard. Depending on the material that needs to be dug, distance and whether a free-standing post is necessary, this can influence the price.

Think your installation might be standard? See what’s included in our standard installation here.

If you do end up incurring additional fees, it is important to remember that by charging at home you could save up to £1,100* per year compared to public charging.

*Total potential savings estimated to be £1,185. This is calculated using an average driving efficiency of 3.5 miles/kWh and annual mileage of 8,292 miles. Savings compares a smart (home) charging rate of £0.07 per kWh (May 2024 Ovo Anytime tariff) with a slow/fast rapid rate of £0.57 per kWh (ZapMap Price Index April 2024).

If you thought all new EVs were out of your budget range, then think again. The new all-electric Dacia Spring is now available to order from just £169 a month or £14,995.

The Dacia Spring is available with a choice of two versions with either a 45bhp or 65bhp electric motor linked to a 26.8kWh battery. That would take just four hours to fully charge on an Ohme home EV charger.

Dacia claims a range of 140 miles on the standard WLTP cycle or 186 miles if driven carefully in an urban environment. The Spring is just one of a number of forthcoming new EVs with what are sometimes referred to as ‘right-sized’ batteries.

So while the Spring’s 26.8kWh battery may seem relatively small, for a small urban hatchback that’s likely to be undertaking lots of shorter journeys as opposed to regular motorway driving, it’s not a problem. Citroen’s forthcoming new e-C3 with its 44kWh battery and 199 mile range will be cut from a similar mould.

Both will enable the likes of Citroen and Dacia to bring the cost of their respective new small EVs down (as that £14,995 price tag attests) while still enabling those on a budget to take their first steps into e-mobility for the first time – even perhaps as a household’s second car.

And don’t be thinking just because the Dacia Spring’s price is low that so is the equipment level. All Springs will have a seven-inch digital instrument display, cruise control, air conditioning, parking sensors and remote central locking as standard. It also boasts a 1004-litre boot with the rear seats folded down, which is equal to some larger superminis on the market.

The new Spring is available to order from Dacia now with deliveries later this year.

Charlie Mainwaring is the Head of Distribution Sales at Ohme, overseeing the Built Environment team specialising in helping developers to fit the best EV chargers to their properties. Here he explains why Ohme is the perfect choice for developers:

When did the building regulation changes come into law requiring the majority of new residential developments to have electric vehicle (EV) charging points installed?

The Part S Building Regulations arrived on 15 June 2022 for new build properties and major renovations. These regulations stated that they had to have EV charging points installed.

However it only applied to any locations applying for planning permission after that date, so ongoing projects weren’t affected, hence there has been a little delay in chargers actually being fitted to new homes.

Is Ohme already talking to housing developers?

Yes, we’re constantly talking to housing developers and working with them to help offer the best EV charging solutions for their customers. But we’re invested in the relationship, we’re not just solving a problem for the house builder, we’re providing a long term solution for the home owner as well.

We are also the official EV charging partner in the House of the Future project, a £16m research laboratory at Salford University, helping to test for and build the low carbon homes of the future. So Ohme is not just helping developers today, but also in the future too.

What can Ohme offer to housing developers?

Our EV chargers are fully compatible with the latest smart charger regulations and also help developers with their own building regulations. We want to help support those developers when customers start their EV journey.

Some customers might already have an EV when they move into a new home, others may not buy one for a while and we’re here to support all of them. Either way, customers will always have questions and Ohme is the only EV charging company that can offer such a high level of ongoing support for developers with our large in-house customer care team in the UK.

Why should a developer choose Ohme?

Ohme’s core aim is that nobody gets left behind in the transition towards greater e-mobility. We’re now the trusted EV charging partner for Hyundai, Mercedes-Benz, Polestar and the Volkswagen Group in the UK, as well as for Octopus Energy and Motability.

Simply put, housing developers don’t know who will be buying their new homes and don’t know what energy provider their customers are likely to choose. Ohme is the only EV charging company that can work with all energy providers and all tariffs. That means that housing developers won’t be restricting their future customers in terms of the energy provider they choose or the tariffs that they pick.

Housing developers should ensure that they do their due diligence and ask these questions of whichever charging manufacturer they work with, rather than just thinking that all EV chargers are equal.

Not only is our charger the smartest one on the market along with being fully compliant to all the latest regulations, but we are constantly improving the product through firmware updates.

All housing developers are bound by the Consumer Code for Home Builders which ensures that buyers are fully supported before, during and after the home-buying process. Ohme is committed to ensuring that that Code is adhered to for their choice of EV charger.

What sets Ohme apart from others?

As well as our high level of product reliability and also our access to all UK energy tariffs that I’ve already mentioned, probably the biggest thing is the efficiency of our charger installation and commissioning process.

Crucially, our chargers don’t need to connect to wifi, so they boast first fix install for electricians. That means there’s no second visit when a customer has finally moved in and no extra cost to the developer, so the developer is making savings with Ohme compared to rivals. Plus, because Ohme’s chargers are quick to fit, an electrician can fit more of them per each site visit compared to other chargers too.

Furtheremore, developers can access our chargers through multiple procurement routes. We work with all of the national electrical wholesalers and builders’ merchants such as Travis Perkins.

Ohme has a dedicated Built Environment team that can help work with developers through any specific issues or questions they might have to help assist them.

We can also create and provide co-branded home-owner packs, to help deliver best possible customer service and introduction to Ohme for their buyers, plus can offer numerous marketing opportunities with our partners.

And what about sustainability?

As well as low cost EV charging, Ohme chargers offer the further option of charging at the times of the lowest CO2/kWh of electricity on the grid. Not only does this help energy providers to maximise renewable energy availability, but it also helps to keep future energy bills lower. Our partnership with Motability saved 13,500 tonnes of CO2 in 2023 – the same amount absorbed by 550,000 trees per year.

This also helps developers to demonstrate that they are helping to meet sustainability targets. Ohme is increasing working with developers to provide dedicated individual sustainability reports to help demonstrate the savings Ohme can help developers to deliver.

Who are Ohme’s existing partners in the build environment?

We are already the official charging partner for a number of housing developers including Harron Homes and Hollins Homes, Castlethorpe and Abel Homes and many more.

Castlethorpe Homes, based in Oxfordshire, has chosen Ohme as its official EV charger supplier.

Castlethorpe Homes is a housing developer building new homes in and around the Cotswolds and surrounding areas. Where Castlethorpe stands out from its rivals is with its commitment to the very latest innovations and technologies in sustainable techniques and materials, hence its reason for picking Ohme chargers for its houses.

“When choosing an EV charger for our developments, Ohme was the obvious choice for us,” said Chris Warner, Founder and Managing Director of Castlethorpe Homes, “The level of charging flexibility that Ohme’s technology can offer is second to none. Ohme’s ability to work with any energy tariff on the market, including the cheapest ones in the UK, is an important factor for any current and future EV drivers when they’re viewing our homes.”

Castlethorpe Homes carefully vets its supply chain to ensure that its homes don’t just meet the current building regulations but also have money and environmental saving opportunities built in. So that means items such as Photo Voltaic panels on the roof, air source heat pumps and EV charging points such as those from Ohme. The result is that Castlethorpe has even been announced as a finalist in the ‘Best Use of Renewables’ category in the Making Better Homes 2024 awards for its development at The Paddocks in Bramley.

“With its commitments to building sustainable homes and the very latest innovations, Castlethorpe Homes is a natural partnership for Ohme,” explained David Watson, Ohme CEO. “With their dynamic charging capability, Ohme’s chargers can help encourage energy companies to prioritise and invest in renewable energy, so alongside Castlethorpe’s energy-efficient homes this is a great collaboration.”

In its ongoing support of more sustainable housing, Ohme is the official charger provider for the House of the Future project at the University of Salford.

You can find more information on Castlethorpe Homes here.

Leading Norfolk-based house builder Abel Homes has chosen Ohme as its official EV charger supplier for its development in East Harling, Three Squirrels.

Abel Homes is renowned in the industry for its commitment to award-winning, high-specification homes designed for low energy consumption and reduced running costs for the owners. With the ability of Ohme’s products to charge when electricity rates are at their lowest and also when renewable energy provision is at its highest, this made it a natural choice for Abel Homes.

“We know that it makes perfect sense for people to move to a more eco-friendly new home with lower bills and increased efficiency, which is why we chose Ohme as our charging partner,” said Tony Abel, Chairman of Abel Homes. “All Abel Homes properties boast an EPC A rating for energy efficiency, the highest possible, so our collaboration with Ohme was an obvious choice, given the synergy of both companies.”

Underlining the eco-credentials of its properties, all new Abel homes feature solar panels, an air-source heat pump, as well as under-floor heating and triple-glazed windows. Ohme’s dynamic smart chargers will allow owners of an Abel home to continue that sustainable theme enabling the maximum use of renewable energy when charging their electric vehicle. The first Abel Homes site to be fitted with Ohme chargers is Three Squirrels located in East Harling, Norfolk.

Since June 2022, legislation has required the majority of new homes to be fitted with EV chargers to help cut carbon emissions and encourage electric car use. If charging with Ohme using an off-peak smart electricity tariff, an average driver could potentially reduce the annual running costs of an EV to less than £130 a year – a huge saving over an equivalent petrol car of more than £1100 a year.

“I am delighted that Abel Homes will be fitting Ohme chargers on its new developments,” said Ohme CEO, David Watson. “The commitment of Abel Homes towards energy efficiency and lower bills for its new homes makes it a perfect built environment partner for Ohme.”

The 2024 World Car of the Year awards were announced at the New York Motor Show last week and the all-electric Kia EV9 was a winner not once, but twice!

Taking both the World EV Award and also the overall World Car of the Year award, it’s the fifth time that Kia has won in the 20 year history of the World Car Awards.

“We are hugely honoured that the 2024 EV9 has been named the World Car of the Year and World Electric Vehicle,” said Ho Sung Song, Kia President and CEO. “This triumph is a testament to our unwavering commitment to pusing the boundaries of technology and design excellence. The Kia EV9’s continued success will drive us to keep delivering exceptional vehicles that redefine the driving experience for customers around the world.”

The Kia EV9 was chosen by the World Car of the Year jury of 100 journalists from 29 countries and succeeded against the other two finalists – the BYD Seal and Volvo EX30. This win for the EV9 follows on from its other success being named as the UK Car of the Year last month.

The other EV winners in the awards were the Hyundai IONIQ 5 N which took the World Performance Car award, the Volvo EX30 which took the World Urban Car award the BMW i5 which won World Luxury Car and the Toyota Prius which took the World Car Design of the Year.