Navigating shifting tax tides for future fleet success

Sohrob Aslanbeigi of Fleet Operations explains how well-managed salary sacrifice schemes remain pivotal for cost-effective fleet electrification, talent retention and long-term ESG, even as tax benefits change.

Salary sacrifice car schemes remain a vital catalyst for fleet electrification and sustainable mobility, despite Benefit-in-Kind (BiK) advantages narrowing and the UK’s tax landscape evolving.

Incremental tax increases are taking place – with BiK for electric vehicles rising from 2% to 3% in 2025/26 and set to reach 5% by 2027/28 – but the financial and environmental benefits remain compelling.

The end of the Vehicle Excise Duty exemption for electric vehicles has added a small but symbolic cost to EV ownership. Compared to personal leasing, however, employees accessing a car through a salary sacrifice scheme can still make substantial savings on a new EV.

These savings stem from lower income tax and National Insurance contributions, alongside low EV running costs.

For employers, the advantages range from improving cost efficiency and simplifying administration to boosting recruitment and retention and helping meet sustainability goals.

Salary sacrifice is still a win-win

Salary sacrifice is one of the few employee benefits that offers meaningful value for both a business and its workforce.

Employees benefit from saving money and having the simplicity of one fixed monthly payment that covers everything from maintenance to insurance.
Employers benefit from predictable fleet expenditure, greater levels of staff engagement and a low-risk way to transition to greener vehicles, including those that receive a cash allowance and would make their own arrangements

By offering a fully maintained EV through salary sacrifice businesses are more likely to stand out as responsible and forward-thinking employers, supporting both workforce wellbeing and ESG.

A smarter way to manage cost and complexity

The design of a scheme becomes ever more critical as tax benefits are gradually eroded.

Fleet Operations’ SalAd scheme was developed with flexibility and transparency front of mind. Its multi-bid approach ensures that no single funder dictates pricing for customers. Each vehicle quotation is sourced from a panel of lenders to secure the most competitive monthly cost.
This creates greater value for both employees and employers, with wider vehicle choice providing a buffer against fluctuating vehicle availability and pricing.

SalAd also reflects Fleet Operations’ independence as a provider, ensuring impartial advice and a tailored approach, from EV-only policies to mixed fuel fleets.

Management is further simplified through minimal employer administration and built-in protections for lifestyle changes such as redundancy or maternity.

Aligning salary sacrifice with long-term ESG goals

Salary sacrifice schemes provide a measurable and cost-efficient way for businesses to help accelerate EV adoption.

With transport emissions under increasing scrutiny, the ability to offer employees a greener way to drive while, at the same time, maintaining cost control can offer a strategic advantage beyond the confines of HR.

Salary sacrifice is consequently evolving from a tactical benefit to a cornerstone of fleet strategy, with schemes such as SalAd demonstrating how fleet electrification and employee engagement can go hand-in-hand.