EV salary sacrifice schemes: broker vs direct leasing. Which is right for your business?

EV salary sacrifice schemes have become one of the most tax-efficient employee benefits available to UK businesses. Employees lease an EV through their employer in exchange for a reduction in gross salary, saving on income tax and National Insurance contributions for both the employee and business.

Because electric cars are subject to just 4% Benefit-in-Kind (BIK) tax in the 2026/2027 tax year, the tax savings for employees can be substantial. Salary sacrifice can be the cheapest way to drive.

For employers, the savings on Class 1 National Insurance contributions can offset the cost of administering the scheme, making it a genuinely cost-neutral or even cost-positive benefit.

But before you can start offering EV salary sacrifice, you face a choice: should you work with a broker, or go directly to a leasing company? The right answer depends on your business size, internal resources, and what you want the employee experience to look like.

A specialist broker acts as an intermediary between your business and multiple leasing companies. Rather than negotiating a deal with a single funder, the broker accesses a panel of providers to find competitive rates and packages on your behalf. Some also provide a scheme management platform.

• Embedded costs. Brokers make their margin somewhere. Often within the cost of the lease itself. This can make it difficult to see exactly what you’re paying for the intermediary service vs the cars.
• Lack of accountability. Not all brokers are registered with the BVRLA (the British Vehicle Rental and Leasing Association, aka the industry body for car leasing). If they aren’t, they won’t have signed up to the broker code of conduct which holds suppliers to minimum standards of and supports customers to challenge suppliers who don’t uphold them. It’s crucial that you check this if you’re going down the broker route.
• An additional layer between you and the funder. If something goes wrong with a car or contract, having a broker in the middle can slow down getting your employee back on the road. 
• Inconsistent experience across your team. Going through a broker may mean different organisations funding your employees' cars. Funders often take different approaches to servicing, maintenance and repairs, meaning your employees can get a different level of service to their colleagues, which could cause headaches for you. 
• Less power to escalate issues. Since multiple companies may be providing your fleet, you’re less likely to have the clout to step in and hold them to account if things go wrong.
• Variable quality. The salary sacrifice broker market ranges from highly specialised platforms with good technology, to generalist brokers with little more than a spreadsheet. Due diligence matters.
• Multiple credit lines and funder contracts. With some brokers you may need to sign multiple contracts and take out multiple credit lines to fund your employees’ cars. This can result in a risk of over-exposure for your business and potentially higher costs for your employees. Many brokers will advertise that they give you access to the full market, meaning potentially better rates on your employees’ cars, but this can mean you need to sign multiple contracts with different funders to access the rates you’re quoted.
• Credit checks on each car order. Your business may need to be credit checked every time one of your team orders a car. This could impact your credit score, cause more admin for your team, resulting in a significantly slower process to get your employee on the road . 
• Confusing early termination fees.  Although many brokers claim to have no ‘early termination’ fees, aka nothing to pay if your employee needs to get out of their contract early, the reality can be different. Often your business will need to pay an ‘early get out’ fee directly to the funder of the car, with the broker then refunding you. This can cause huge cashflow issues particularly for small businesses.

• Access to a wider market. Brokers compare deals across multiple leasing companies, so they may be able to negotiate a lower price on your behalf.
• Scheme administration handled for you. Some EV salary sacrifice brokers offer platforms that manage the employee journey, reducing the burden on your HR and finance teams.
• Tax and compliance expertise. Salary sacrifice involves specific HMRC rules around National Insurance, income tax, and benefit-in-kind calculations. Reputable brokers understand these rules and can help you stay compliant without needing specialist in-house knowledge.
• Scalability. If you have a varied workforce with different needs and salary levels, a broker can manage a broad vehicle catalogue and eligibility rules in a way that some leasing companies can’t.

Approaching a leasing company directly means negotiating your salary sacrifice scheme with a single provider. Some of the UK's major fleet leasing providers offer salary sacrifice as a product in their own right, with varying degrees of scheme support included.

• Generally lower costs. Removing the broker margin can mean better rates, particularly if your business has the scale or negotiating power to get a strong deal independently.
• A direct relationship. You deal with the funder directly, which can mean clearer accountability and faster resolution if issues arise.
• Full transparency on pricing. You know exactly what the leasing company is charging, with no embedded or hidden intermediary fees to account for.
• A simpler journey. You, as the employer, only have one company to deal with which can reduce the amount and complexity of paperwork - including only having one master agreement as opposed to multiple.
  • The same goes for your employees. It also means you’ll probably have one rep who can walk you through the entire process rather than being handed off to multiple people, causing confusion and complexity.
• A consistent experience for your team. Since you’re dealing with one supplier, your employees will get one consistent experience, making it much easier for you to manage. For example, they can expect to deal with the same service, maintenance and repair partners and you’ll have one organisation to go to for help if anything does go wrong while they’re on the road. 
• They have skin in the game. Since it’s one company looking after you and your employees, going direct can mean you get a better customer experience across the board because one team deals with any issues or common questions that may come up.

• Limited to one provider's offering. You can lose the ability to compare rates and vehicle availability across the whole market. So check the details on pricing and what cars are available before you sign.
• Admin levels can vary. Salary sacrifice admin involves payroll deductions, insurance coordination, breakdown cover, HMRC compliance, and employee communications. The amount of support leasing companies give can vary. Some, like Octopus EV, give you all the support you need across these areas, whereas others treat salary sacrifice as a bolt-on rather than a core product. 
• Weaker scheme management tools. With some leasing providers, the employee-facing experience can be less polished, which can suppress uptake and reduce the NI savings your business captures. This isn’t the case with Octopus EV. Our whole experience is simple and straightforward. You and your team manage everything online, with the top customer experience you’d expect from Octopus as the only energy supplier recommended by Which? for 9 years in a row.

The right choice depends on the amount that you’re willing to manage internally vs outsource to a specialist provider. It also depends on the importance you place on your employees’ experience, the value they get, and the amount you can save as a business through salary sacrifice. 

In either case, it’s worth getting comparable quotes from both routes, being explicit about exactly what’s included for your employees, and what administration support is included for your business. The headline lease rate is only part of the picture. 

• EV salary sacrifice schemes save employees money on income tax and NI, and save employers money on Class 1 NI contributions.
• Brokers offer access to a wider market, but can add a layer of cost and complexity.
• Going direct can be more cost-transparent and cut out the middleman, but can sometimes place more administrative responsibility on your business if the leasing company offers limited support. This isn’t the case for Octopus EV, where you’ll get a dedicated account manager to support you through the whole process, and your employees’ experience is front and centre for us. 
• It’s worth comparing both options with like-for-like quotes before committing.

Looking to launch an EV salary sacrifice scheme? Speak to an EV salary sacrifice expert to find the right structure for your business size and workforce.