Autumn Budget 2025: Salary Sacrifice Car Schemes Remain a Smart Employee Benefit

The UK Autumn Budget 2025 brought sweeping changes to pensions and tax thresholds, but for employees and businesses considering electric vehicle (EV) salary sacrifice schemes, the news is reassuring.

While pension-related salary sacrifice will face restrictions from 2029, salary sacrifice remains fully protected, continuing to offer one of the most cost-effective and sustainable employee benefits available today.

In this post, we’ll break down what the Budget means for salary sacrifice, why vehicle schemes are still a standout choice, and how TCH Salsa can help your business and employees make the most of this opportunity.

 

What Changed in the Autumn Budget?

• Pension Salary Sacrifice Capped: From April 2029, National Insurance relief on salary-sacrificed pension contributions will be capped at £2,000 per year. Contributions above this will attract NICs.

• Vehicle Salary Sacrifice Unaffected: Despite speculation, the Chancellor confirmed that salary sacrifice for cars, including electric vehicles, remains unchanged. This means employees can still enjoy full tax and NIC savings when leasing an EV through salary sacrifice.

Why EV Salary Sacrifice Is Still a Winner

EV salary sacrifice schemes continue to deliver:

• Big Savings: Employees can save 28-47% compared to personal leasing, thanks to income tax and NIC reductions.

• Low Benefit-in-Kind (BiK): EV BiK rates remain at just 3% for 2025/26, rising gradually to 9% by 2029 - far below petrol/diesel rates of up to 37%. Plug-in hybrid vehicles are also a smart choice as they also attract lower BiK rates.

• Inclusive Packages: TCH Salsa’s scheme includes insurance, unlimited tyres, servicing, breakdown cover, and even home chargers, making EV ownership hassle-free.

• Employee Retention: Access to EV salary sacrifice is a valued perk, with many employees say it makes them more likely to stay with their employer.

  
  

• Big Employer National Insurance Contribution savings on zero and low emission vehicles which can be retained - or some, or all, of them being passed back to the employee – making the scheme even more competitive for them.

With many drivers already switching to EVs through salary sacrifice and uptake growing by 51% in 2024 alone, this benefit is reshaping how UK workers access clean and affordable transport.

How TCH Salsa Makes It Simple

At TCH Salsa, we specialise in helping businesses implement vehicle salary sacrifice schemes that work for everyone:

• End-to-End Support: From payroll setup to HMRC compliance, we handle the admin so you don’t have to.

• Flexible Leasing Options: Choose from a wide range of electric cars, tailored to your employees’ needs.

• Cost Transparency: Clear monthly costs, no hidden fees, and full guidance on tax savings.

• Employee Engagement: We provide resources and webinars to help staff understand the financial and environmental benefits.

Looking Ahead

While the Budget introduced new challenges for pensions, it reinforced the government’s commitment to EV adoption. Salary sacrifice remains one of the most powerful tools for businesses to:

• Reduce fleet emissions.

• Offer attractive employee benefits.

  
  

• Support the UK’s transition to net zero.

Ready to future-proof your employee benefits and make EVs and low-emission vehicles accessible for your team?


Talk to TCH Salsa today and discover how easy it is to implement a salary sacrifice scheme that saves money and supports sustainability.

Find out salary sacrifice can help your company today