You Can Buy An Electric Car Pre Tax Via Your Salary Using BIK - YouTube

welcome to today's video today's video I'm going to be talking with Charlie and

Fiona from Octopus electric vehicles we're going to be talking about BIK

salary sacrifice and other things octopus electric vehicles do including the 2035 ban

so the first thing to ask you charlie is about BIK

so BIK that stands for benefit in kind any benefit that an employee gives you

as I know at the moment so anything that's sort of given to you for free

from an employer they do have to tax you on but some rules gonna change on that

on electric cars and I don't fully understand it myself even being in the

motor trade so I was hoping that maybe you could explain that a bit better

your employer provides you with something that would be seen as a benefit that

could be taxed so for example if you a laptop that you use for work then

that's not taxed but if they give you a laptop that you used for Netflix or for

checking Facebook then that would be taxed

car that you use for not only work

but also the shops "personal use" use yeah yes so at the moment on benefit in kind what

what our EV's that you pay a total cost of what the total cost cost

so if it was a forty grand car at the moment you pay

sixteen percent

sixteen percent and if you have a if you have an EV from April onwards what's the tax

benefit on that

zero percent

so you go from 16 to 0%

yeah

so you're going from

being tax basically 16 percent of that forty grand to zilch

yeah

at the moment what I said what's the cheapest petrol car percentage

16 percent

okay what an ev is now

and is that dropping to zero

only electric vehicles

only electric vehicles "ONLY FOR ELECTRIC" So all

the petrol cars like staying at 16 percent

what petrol car converts to 16 percent what's the size

right now "yes" it's something under 75 g/km

okay so we're talking 1 litre cars very underpowered stuff that people for a

business car would wouldn't not be really happy driving long mileage for

not a proper car so that it makes perfect sense for them currently to buy

one but from when it goes to 0% BIK

you'd be insane to not have an electric car not only we got the zero percent

dropping on that it's zero percent on the total cost of the car from the start of

the lease so even what the government announced the next four or five years on

BIK benefit in Kind

next three years we only know about the next three 0/1

and then 2

yeah so even if you're worried about year 4 year 5 let's be

honest the government are still going to keep that a relatively low benefit in kind

tax but regardless of that it's still going to be cheaper than petrol so if

you're getting a company car at the moment you're thinking get a company car

then you really really need to look at how much money that's costing you and if

your company will give you an electric car octopus deal with company leases

company benefit in kind octopus can help you out

EV's there's a link referral code down bottom of the video as well if you

need to use octopus referral link there's a 50 pound amazon voucher for me

and for you for using it and you can spend that on whatever you want but it's

really really important that you look at what you're costing you currently to

have a company car and if you're paying anywhere above 16 percent today then an

Ev will from April will be zero

Charlie the other thing I know you do

because you're always pushing it on social media and you always talk about

it is salary sacrifice now I've never really heard about it before heard about

some companies doing that on child care and stuff but I've never heard anyone do

salary sacrifice on cars and I know that as a dedicate ev company you're the

one of the only companies that I know in the Dedicated EV space that have a

dedicated team just dedicated to salary sacrifice could you kind of explain to

me as an employer and also as an employee what it would mean

so salary sacrifice is a system by which you like to buy stuff through your

salary also their business essentially a bit like the cycle to work scheme i don't know

if you've used that or gym memberships or some people buy train tickets so

yearly train ticket and then it takes out their salary every month because of

the zero percent benefit in claims you can then use its buy a car and not see a

huge tax what a car for that

right okay so

let just just trying to sum it up in my head then so for sacrifice first of

all I need an employee that agrees to the scheme or can you help the employee

set this up or so the employer needs to set the scheme up okay but we can help

with that we've got a cheat sheet and our FaQ document okay and that

allows employers to understand what the system is it can seem really daunting

but actually its not at all and it's employee you you can share

that with HR or finance or somebody like that

so if I kind of understand some

sacrifice right it means that the money will be coming out before I'm taxed

yes

yes so it's it's a company car that you pay for "okay" but the business just

doesn't give you that money okay does that make sense "yes"

so because the business doesn't give you that money the taxman does not tax you

on thatamount

yeah so effectively end up with a company car for a cheaper

rate than what if I went direct and bought it on a PCH what does that mean

in in terms of figures so in figures you can save a considerable amount and it

depends on your tax bracket but you can save up to the amount of the you can

save up to the tax bracket that your in off the cost of your car so if you

are paying if you are if you're enough 40% tax bracket you can save up to 40%

if you're a 20% tax bracket you can save up to 20% so it depends on the car it

depends on your tax bracket as well

and have you got any illustrations on these

figures that we can look at

we are comparing a BMW 3-series 330d m sport to

a model 3 Tesla Model 3 standard range plus

okay what's the list price those

list price is about 41,000 for both it's about 400 pounds more expensive for the

BMW but over the course of three years when you total everything up you can

save host about 8,000 pounds

wow is that including fuel savings

yeah

what kind of mileage have you based that on on

8000 miles so not not above the national average but not what bigger cars tend to do

so as we both know the ban has been moved forward now to 2035 really

strong move to possession us in front of other countries around the world not one

country though we're not gonna mention that one because it's the best country in the world

[LAUGHING]

If anyone hasn't guessed Charlie Scottish

and the but I think it maybe it doesn't go

far enough I think that it is has scared quite a few people maybe some businesses

or some other people into thinking that this is a lot closure I think 20 or so years

feels a long time away and as soon as you get like 15

yeah it's because I mean

the important thing to know is that some of the major changes with the 2035

ban is the 2040 ban included hybrids the 2035 ban does not include hybrids

there's also some other things to remember which is I personally think the

people buying factor will force manufacturers to get rid of petrol cars

a lot quicker than that I really do I think when people start realizing how

many charge points are how easy it is how much cheaper it is and what better

it is just a local air quality cities like London for example which are really

pushing hard for ultra low emission zones I do think that people power will

move beyond the band of 2035

yeah and I think also that a lot of people think

that that's really close 2035 but iPhone was only only released 13 years ago this

summer it'll be 13 years since iPhone and if we think how your life has

changed through your office through your home the way you speak to Alexa or to

siri now that has all changed in a relatively short period of time

and you've just helped made everyone who watched my videos feel really old

because 13 years since the initial iPhone "yes" yes so if you feel old leave a comment

down below thanks charlie and I'll pass on all your messages to

Charlie at the end about how he's made us all feel like we're old people

hey

hey Fiona so we've just been talking to Charlie about BIK and stuff like that

and also the 2035 ban that's coming in but I thought I'd get you as Octopus

CEO to sort of maybe explain to me what you think impact this is gonna have on sales

yeah do you know what I think that the demand is there already and if the

vehicles were here in in bigger volumes actually I think that we'd be meeting

that demand and they'd be flying off the shelves so actually I think the 2035 ban

will pretty much happen as long as the manufacturers can actually continue to

get vehicles here to the UK I think out of being a bit more ambitious and

getting really really serious about some of the incentives could have a further

impact but actually I think 2035 will probably happen anyway

now I'm saying to

Charlie that I think that maybe the 2035 ban will be beaten because the public's

attitude will want to move faster

yeah yeah I mean we see that already so about

three years ago and a load of drivers were asked if they were interested in

switching to electric cars and I'm not twenty-five percent of them thought

their next car might be electric they did the same survey last year and it was

over seventy percent so we already seen a massive increase and actually we've

seen ourselves over the last year that interest has grown even greater so I

think actually if they did that survey again right now it would be over ninety

percent so I mean we see huge numbers of people really excited about it and

actually with salary sacrifice for example yeah when we started talking

about salary sacrifice three years ago we'd have these conversations that ago

there's this thing it's called salary sacrifice you can pay for your electric

car lease out of your gross salary and people go electric cars are they a thing

and then you end up talking about electric cars for the next half an hour

whereas now we've seen a shift now we say oh did you know you can pay for your

electric car at your gross and people go no way can i Tesla I can do that at

my gross salary and people know about this now they've seen the cars on the

roads they're seeing the ChargePoint is popping up everywhere it's totally different

it's really surprised me I mean it's nice to

also hear that you actually have a dedicated team that just deal with

select sacrifice here yeah absolutely I mean it's becoming such a major thing

for us and absolutely flood of inquiries unsurprisingly because it is a

no-brainer and I call of the big papers of helped us get the word out which is

fantastic because really just when people hear about it the thing why was I

not I mean people can save 40 percent on their monthly car lease and they can

roll in you know insurance servicing maintenance all of this other kind of stuff so

yeah and with BIK going to 0%

amazing

it's it makes perfect sense

yeah that's it I mean it's it's a huge game-changer and we're seeing this

absolute flood obviously people are really excited

what do you think it's going to be one of the biggest barriers is we're gonna get to this 2035 target

do you reckon it's going to be charging infrastructure do you reckon it's going to be the

public opinion which I think we both agree that public opinion is just

growing in growing and growing so I don't think that's a barrier "yeah"

do you reckon its gonna be charging or do you reckon it's going to be physically getting

manufacturers to build these cars

yeah well on charging infrastructure

you know we had 25 percent more places you can publicly charge your EV than

we have petrol stations in the UK and not to mention the fact that you can

charge up at home you know or even like your your family's home if you go and

visit them to the weekend or whatever so I don't think it's and also we've seen

from Norway charging infrastructure is not the blocker and car manufacturers

that is the biggest challenge at the minute so obviously we've seen that

Tesla leading the way they're bringing a load of vehicles here but actually we

need to get obviously a bigger range of vehicles but also much much higher

volume this year in the UK were expecting a hundred thousand EV's we sell

we buy three million vehicles every year in the UK so a hundred thousand is just

a fraction "its tiny" tiny compared to at to the number of vehicles that we sell and

then if you look at like the broader market let's take VW Group VW Group

one of the traditional manufacturers and really come out and said really bold

thing is about their ev strategy fantastic they're saying over the next

ten years they're going to build and sell 22 million EV's now in the UK

we're gonna buy 30 million vehicles here so VW Group wouldn't actually meet

a demand even if they brought all of them here and we were just buying EV's

and they've only got 15 years left well yeah so they said this is over the next

10 years that's their kind of numbers so let's take over the next 10 years

actually in the in Europe we're buying 16 million vehicles that's 160 million

over ten years so 22 million again from them is not going to be a lot and

actually we've seen some of the other manufacturers like Toyota not even

talking about Ev's for Europe so actually can we meet the demand and

actually I wonder if there's gonna be a big shake-up in that market because

maybe they're gonna be like Chinese manufacturers for example that actually

might be able to ramp up more quickly than some of the traditional manufacturers

and which we've seen with mg "yeah" I mean the way they've been

the way they've numbers they're Meeting they're hitting all the targets straightaway

yeah and so I mean we're going to have this gap between demand

and actual supply and there's a massive amount to go out and it's really whether

or not the traditional manufacturers can get great EV's out there that's at

volume to be able to really meet that demand

great cheers thanks very much Fiona

cool

very welcome

that's all I'm gonna hear but it's gonna drive me

insane try not to move too much there we go

welcome to today's video sorry

this is going to take out