With the April 2025 tax changes now in place and the cost of living still stretching household and business budgets, more people are looking for a smarter, more affordable way to get a new car.
That’s why we’re getting asked more often:
Is the salary sacrifice scheme still worth it in 2025?
At Car Leasing Made Simple, we work with both businesses and individuals every day to set up salary sacrifice schemes for electric vehicles. So we’re here to break it all down in plain English — whether you’re running a business or just looking for a better way to drive a new electric vehicle!
Let’s start with the basics: what is salary sacrifice?
It’s pretty simple: a salary sacrifice scheme allows you to lease a brand-new car — typically an electric vehicle — by giving up a portion of your pre-tax salary.
Instead of buying or financing a car the traditional way, you lease one through your employer. Your monthly lease cost is deducted from your gross pay before tax (Calculate Here). That means:
- You save on Income Tax
- You save on National Insurance
- And your employer does too
Plus, the lease usually covers more than just the car. It typically includes maintenance, servicing, insurance, breakdown cover, and road tax — all bundled into one monthly figure.
It’s a great option for people who want a new, well-maintained car without a big upfront cost or the hassle of ownership.
What’s changed in 2025?
There are two key updates you should know about:
- Benefit-in-Kind (BIK) tax on electric vehicles has increased from 2% to 3% this April, and it’s set to rise gradually to 5% by 2027.
- Employer National Insurance contributions have also increased, from 13.8% to 15%.
So yes, there are changes — but that doesn’t mean the savings are gone. Let’s look at how salary sacrifice still stacks up…
Why salary sacrifice still makes sense for drivers
You still save on tax
Even with BIK now at 3%, EVs are still far more tax-efficient than petrol or diesel cars — which often attract BIK rates of 25% or higher. That can mean a significant monthly saving, especially for higher-rate taxpayers.
The tax break might not be quite as generous as last year, but it’s still one of the cheapest ways to drive a brand-new electric car.
Fixed monthly costs
Everything’s rolled into one simple payment. That includes the car, servicing, insurance, road tax — the lot. For many drivers, this is a huge benefit. No big surprises, no maintenance stress.
No upfront costs
Unlike PCP or buying outright, there’s no deposit needed with a salary sacrifice lease. You get access to a new car without tying up your cash.
Better cars, more choice
Thanks to the tax savings, you might find you can afford a higher-spec model than you thought. With options like the Tesla Model 3, BYD Atto 3, Hyundai Ioniq 5, and even used EVs available, there’s something for every style and budget.
Learn more about the employee benefits
What’s in it for employers?
Plenty. If you’re a business owner or HR lead, here’s why it’s still worth offering salary sacrifice in 2025:
Reduced NIC liability
With NIC rising to 15%, businesses are naturally looking for ways to offset the cost. A salary sacrifice scheme helps bring that figure down — because you’re paying NIC on a lower gross salary.
No capital outlay
There’s no need to own cars or manage a fleet. We take care of the setup, supply, and admin. You just offer the scheme and approve the orders.
It supports your net zero goals
Switching employees to electric helps reduce emissions and strengthens your sustainability efforts — especially helpful if you’re working on ESG targets.
Better benefits, better retention
Today’s workforce expects more from their employers. Salary sacrifice is a real, tangible benefit that helps with recruitment and retention — especially when staff are trying to make smarter financial choices.
Learn more about employer benefits
Final thoughts from the team at Car Leasing Made Simple
Yes, the tax environment has shifted. But that doesn’t mean salary sacrifice has lost its value.
It still offers:
- A cost-effective way to drive an EV
- Tangible savings for both employees and employers
- Simplicity and peace of mind
If you’re a business leader looking to support your team, or an employee thinking about your next car, salary sacrifice is still one of the most affordable and accessible options out there.
Want to see what kind of car you could get through salary sacrifice?
Take a look at our EV leasing offers or get in touch with the team to find out how it could work for you.