With the Spring Statement just around the corner (26 March), many drivers and businesses are wondering what it could mean for them. While no major surprises are expected, there are key tax updates that will impact the cost of driving—especially for those considering an electric vehicle (EV).
So, let’s break it down: what’s changing, how it affects you, and why an EV salary sacrifice scheme might still be the smartest way to drive an electric car for less.
Benefit-in-Kind (BiK) Tax – Still a Bargain for EV Drivers
If you get a car through a salary sacrifice scheme, you’ll pay Benefit-in-Kind (BiK) tax on it. The government has already confirmed that BiK for EVs will rise gradually from April 2025:
Currently: 2%
April 2025: 3%
April 2026: 4%
April 2027: 5%
April 2028: 6%
That might sound like bad news, but let’s put it in perspective. The BiK rate for petrol or diesel cars can be as high as 37%! That means even with the increases, EV drivers will still save thousands in tax each year compared to those driving petrol or diesel cars.
National Insurance Changes – What It Means for Businesses and Employees
Another big update is to National Insurance Contributions (NICs):
- The employer rate is increasing from 13.8% to 15%.
- The threshold for paying NICs is dropping from £9,100 to £5,000.
For businesses, this means higher payroll costs. But here’s the silver lining: offering an EV salary sacrifice scheme helps reduce taxable salaries, which means lower NIC payments. It’s a win-win—employees get a cheaper car, and businesses cut their NIC bill.
Road Tax – New Costs for All Cars (But EVs Still Win!)
Starting next year, road tax is changing for all vehicles – including electric ones. Here’s what to expect:
First-year tax:
- EVs: £10
- Petrol/diesel (91+ g/km CO2 emissions): £390
- Petrol/diesel (255+ g/km CO2 emissions): £5,490
- Annual tax after the first year: £195 for all cars
Yes, EVs will no longer be fully exempt from road tax, but they’re still far cheaper to run. Over a typical 3-year lease, an EV driver could save over £5,000 in road tax alone compared to a high-emission car.
Luxury Car Tax – EVs No Longer Exempt
If your car has a list price over £40,000, you’ll have to pay an extra £425 per year for five years. EVs used to be exempt, but that’s changing. The good news? Through salary sacrifice, you’ll save up to 60% on the cost of the car anyway, meaning you’re still paying far less overall.
So, Is Salary Sacrifice Still Worth It?
Absolutely. Despite these changes, EV salary sacrifice with EZOO remains the most cost-effective way to drive a new electric car. Here’s why:
- Massive Tax Savings – Up to 60% off compared to leasing privately.
- Lower NICs for Employers – Cut business costs while offering a valuable perk.
- Cheaper Running Costs – EVs cost less to charge, maintain, and now even in road tax.
- Hassle-Free Package – Insurance, servicing, and breakdown cover are all included.
- Flexible Terms – Drive an EV from as little as 3 months.
With costs rising across the board, the smartest move is to lock in lower rates now before any further changes. If your employer doesn’t offer salary sacrifice yet, now is the time to introduce them to EZOO.
We can help convince them. Get in touch now.
We can help convince them. Get in touch now.
EZOO makes switching to an EV simple, stress-free, and cost-effective. Want to see how much you could save? Explore Salary Sacrifice with EZOO
click here to see our range of premium electric vehicles accessible via salary sacrifice or speak to an expert today.
