The Electric Car Scheme
December 26, 2023
By Paul Homewood
If you wondered why EV fleet sales have been doing so well, look no further than the government approved Electric Car Scheme:
In short, employees can lease an EV via the scheme, paying for it via salary sacrifice. This means that the employee saves the Income Tax and NI he would otherwise have paid:
Salary sacrifices are perfectly legitimate, and commonplace – for interest employees might opt for higher pension contributions from his employer. However what makes the EV option attractive is the very low rate of Benefit in Kind taxation.
To be able to save 30% on the cost of lease payments is naturally hugely attractive to potential buyers, and is a subsidy paid by government.
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NOT A LOT OF PEOPLE KNOW THAT 
No, Paul.
A subsidy paid for by us tax payers. Obvs.
This !!!!!!!
100% – The Government has no money
A custom-made, taxpayer-funded scheme. Pretty well specifically aimed at benefitting the highly paid, highly taxed virtue-signalling crowd. As always, funded from the public purse.
B*****rds!!🤬
Raw CRAP!! Warmist drivel.
It’s not just the employees who benefit. Employers can write off 100% of the cost of an EV in the year of purchase, whereas other cars attract a low rate of writing down allowance.
Just as well given that resale values of battery cars is so poor.
And the employer also save the Employer NI on the salary sacrifice!
NIC is charged on the private use element of company cars, so there will be no gain to either employer or employee as NIC will be transferred from the portion of salary given up to the benefit of the car. Unless of course this scam removes the NIC obligation on BEVs.
Re John Bowman’s comment, the quantum of an EV benefit is tiny compared with a benefit on an ICEV, so the employer NIC is significantly reduced.
£Billions being wasted combatting a ‘problem’ that does NOT exist. WAKE UP!!
Obviously all these short term tax benefits are a “come on” to get people into the market. But in a few years the lost tax on this nasty trick will have to be recovered. How and from whom?
I think we all know the answer.
This is a perfect example of why government ownership of industries never works – they can only see into next week.
The market, us lot, must be allowed to work. Remember the stupidity of forcing businesses to buy diesels and now we are being told we cannot use them and they must be scrapped. Mine is still a perfectly viable car which I don’t intend to scrap.
Indeed government must never be allowed to lead any kind of change.
They are fools.
As my son says, he’s due to get a job related car in March, it’s a no brainier. For any long journeys he’ll use their diesel
Don’t you just love the sanctimonious bullshit ‘Each person wants to make choices to achieve a net zero future.’ Er, no – not me.
Not me either! And anyway, even if every driver in Britain switched to EVs, it wouldn’t make the slightest difference to the World’s climate. What’s more, all the mineral mining for EV battery components would definitely make the World’s environment worse. But for our well heeled virtue signallers, what happens in the World is of no concern to them.
Typo: should it read “The Electric Car Scam”?
The “scheme” usually works. I can remember the advent of colour TV. Rich people first and as they scaled up they got cheaper. I lived on a council estate close to Dagenham and we were aspirational too. We were also envious of my uncle Tom who got a new car at cost price because he worked for Ford. Those cars worked their way down to us as used cars -Anglia, Consul, Cortina and I owned all three at various times. For a while I enjoyed the subsidy of a company car but nothing as generous as what the EV’s attract.
Can this transfer to a thriving second-hand market happen with EV’s?
Forget the hype. What will remain – fire risk, repairs prohibitive, insurance expensive, life of battery & replacement cost etc… I honestly don’t know how true these claims are but one thing for sure – electricity isn’t getting any cheaper and I will not vote for any party that subsidises the rich as blatantly as this.
Can you feel smug if you’re being subsidised by a person on benefits using a prepayment meter?
Which high-flown government department car park will be the first to have an EV fire?
As a former Managing Director I know that the value of the company car has been baked in to employee rewards for 50 to 60 years as they used to be an untaxed benefit, but even after tax on (private use) company cars was introduced, they remained popular.
So those ‘sacrificing’ salary for a BEV – if they already have a company vehicle – will be sacrificing salary on salary already reduced.
But in any case, even if company car is not part of a reward package, wages are ‘sticky’ in that whilst it is relatively easy for an employer to freeze pay increases, actually reducing wages meets with stiff opposition.
Giving up part of your salary for a BEV may look good on paper, but having a BEV won’t pay for groceries at the supermarket check-out, or pay the mortgage, or for that holiday in the sun.
Offering a vehicle in place of pay rises, or in place of a pay bump when promoted can work, but give up part of your pay (earn less) my experience is that would be unlikely.
And having a car which doesn’t have the benefits of an ICE vehicle, isn’t solved by it being ‘cheap’.
Another scheme/scam dreamt up by people who don’t understand how the real world works – desperate to find a solution to their Net Zero fantasy which isn’t going to plan – and a time when everyone has already had a pay cut due to inflation.
Yes, the whole scheme is aimed at employees who don’t have company cars.
The company, as I understand, saves the EE NI as an added incentive, and the employee potentiully saves £5000+ on the lease of the car, more if they are in the 40% tax bracket
“…employees…”
It all stinks of, “I sold my soul to the Company store!”
“Subsidy paid by government?” IOW a subsidy paid for by other taxpayers, many of whom can least well afford and can only dream of having the funds to buy an EV. So unfair!
It seems that almost any scheme with dubious merit cannot fly without assistance at our expense. TV advertising for smart meters is the latest.
Like the morning after, once the market reaches saturation ‘the scales will fall from their eyes’…………… some chance while the capacity for denial and delusion remains limitless. Wicked is the word for what is served up by the govt. in this arena.
I am in the fortunate position of having a smart meter (if those cheap tariffs ever return that required you to have one), but they are too penny pinching to get a signal to it, so it does not work.
Is there a possible connection between this sort of government-funded* free for all and our country being damn-near bankrupt?
Asking for 68 million friends.
* Yes I know, it’s taxpayers money.
This is a surprisingly comprehensive and extensively researched Youtube video about EV’s which has some very interesting data. This from a year ago so some of you may have seen it. “The Big EV Lie”
Yes, good points but still the CO2 will be the death of us and H2 is our saviour tropes.
Since we all (rich and poor alike) pay taxes, these subsidies represent a wealth transfer (in part) from the poor to the comfortably off. So much for a “just transition”.
Yes but we don’t pay equal amounts nor do we get equal transfers. Around 50% of people are net recipients and many get far more in public services and benefits than they pay. It’s quite false to say the poor pay for this therefore. The subsidies to the wealthy are paid by the wealthy.
It’s not that simple. Poor people receive no benefit from this at all, They still pay taxes.
Make a better mouse trap, and the world will beat a path to your door. Build a bunch of expensive, unreliable, highly flammable EVs that you cannot give away to a free market, and get your MP to create Tax Deductions and NI dodges to spur sales. Hey, We are saving a planet here.
“Each tonne of carbon emissions contributes to climate change for centuries…”
Where do they get that claim from?
Doing some research the other day, I found the mass of the earth’s atmosphere is 5.5 quadrillion tonnes.
. . . but your tonne matters!
Ah now GC this is where US and UK definitions can sometimes vary. Is a quadrillion 10 to the 15th power (US) or 10 to the 24th power (Olde English)? That extra Murican tonne could be much worse than a Brit tonne!
I’m not going to think very hard on it, as the point is human output is trivial. Less than trivial.
In American math, digits followed by:
3 zeros is thousands,
6 zeros is millions,
9 zeros is billions,
12 zeros is trillions,
15 zeros is quadrillions.
Those hoping to get an Audi for their battery company car might have to be quick as the company is scaling back production due to lack of demand and re-focussing on normal cars and hybrids – which are due for a ban in the UK a few years after the 2035 ICE ban.