Car tax updates which reduced benefit in kind rates from 16 percent to zero last year was behind the upsurge with drivers now desperate to secure cars at a low price. Experts at Arval UK said almost nine out of 10 cars leased under salary sacrifice schemes are now electric vehicles.
This is an increase from just four in ten vehicles recorded just two years ago.
The number of cars provided by Arval’s salary sacrifice scheme has also increased by 252 percent over the past two years.
Richard Cox, consultant at Arval UK said the new tax discounts now made electric cars “extremely attractive” for motorists.
He said: “The single biggest reason behind the rise of the EV-centred salary sacrifice scheme in the last couple of years has been the introduction of zero and very low rate benefit-in-kind taxation rates.
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They said the new fees would add around £60 per year for those paying 20 percent income tax who purchased a Nissan LEAF under the scheme.
However, charges could rise to £134 for those who pay 45 percent tax on their income.
Despite the increase, Mr Cox said he expected the “interest to continue” into 2021.
He said the schemes were “extremely viable” as long as rates remain low.
Speaking to Express.co.uk in February, CEO Fiona Hiwaerth said she was also “not worried” about a tax rise as drivers would still make huge savings over petrol and diesel cars.
She said: “I don’t think people will necessarily know that it was ever at 16 percent.
“But I think the one percent is so low it’s just relatively negligible.”
She added: “By switching to petrol and diesel to electricity they are saving about 90 percent of their fuel costs because they can charge at home.
“The savings still they are making between petrol and diesel and electricity will more than offset any of that change as well.
“It’s still so low so I’m not worried about it.”
