Salary Sacrifice Early Termination

After your car has been delivered, you have officially entered the contractual commitment of your lease (i.e. four years). And as your agreement is a business contract hire arrangement between your employer and Octopus EV, there’s no “cooling off” or returns period once the vehicle has been delivered.

If you’d like to leave the scheme before your contract, please let us know as soon as possible. We often call this Early Termination.

However, you’ll potentially have to pay a charge - usually 50% of the remaining finance rentals. You’ll also be liable for any charges, if applicable, as detailed in our returning your EV guidance.

Any early termination amount will be charged to your employer, and they will deduct this from your net salary, potentially over multiple months, depending on the amount and any agreements we make, all at your employer’s discretion (this is also applicable to any employees who leave the company).

We ask for 30 days' notice to end a contract. If you're leaving with less than that, please reach out to us as soon as possible to discuss.

You’ll be charged up to 30 days from when you gave notice, or when Octopus Electric Vehicles collects the car from you - whichever happens last.

Our Salary Sacrifice contracts include an Early Termination Waiver - this outlines a set of circumstances where there would be no fee for an early return.

To be eligible for Early Termination cover, you must have had your car for at least six months, unless, otherwise agreed between your employer and Octopus EV.

It’s important to remember that the Early Termination Waiver is to cover for unforeseen circumstances and life events, and is not to allow the return of a vehicle due to personal preference, change of mind or to upgrade your vehicle early.

A minimum period of six months must elapse before you’re able to utilise the Early Termination Waiver to cover a different instance for the same vehicle. For example, taking a payment holiday for parental leave, and later returning the car for an eligible reason.

There are some circumstances where you may not be asked to pay an Early Termination charge (though this is at your employer’s discretion), these can include:

• Resignation
• Redundancy, including voluntary redundancy
• Dismissal
• Extended Parental Leave (see below for more information on this)
• Unpaid long-term sickness leave (see more below)
• Death in service
• Loss of driving licence on medical grounds, for six months or more

You may keep the car during your parental leave and the Salary Sacrifice will continue whilst your salary is above the agreed sacrifice.

If your pay moves to Statutory Pay or if your regular sacrifice would take your net pay below the National Minimum Wage or Lower Earnings Limit thresholds during this time, you may be entitled to return the car without penalty as per the above Early Termination circumstances, or simply keep the car free of charge for a maximum of 12 months from the start of your leave.

If your lease expires during parental leave, you should return the car.

Please note that you are not able to use both options at the same time i.e. take the payment holiday of 12 months, then return the vehicle without penalty following this.

You may keep the car during a period of Long Term Sickness Leave and the Salary Sacrifice will continue whilst your salary is above the agreed sacrifice.

If your pay moves to Statutory Pay or if your regular sacrifice would take your net pay below the National Minimum Wage or Lower Earnings Limit thresholds during this period you may be entitled to return the car without penalty as per the above Early Termination circumstances, or simply keep the car free of charge for a maximum of three months from the start of your leave.

If your lease expires during Long Term Sickness Leave, you should return the car.

If you’re on a career break or any other long-term leave, there are two options:

1. You can decide to leave the scheme

If you decide to leave the Scheme, Early Termination charges will apply.

2. You can continue to use your car and keep the Salary Sacrifice running.

If this isn’t possible because you’re unpaid, receive only Statutory payments, or fall below the National Minimum Wage, you must make arrangements to reimburse your employer directly (e.g. cheque, Direct Debit, standing order) so you may continue to use your car. This reimbursement will be the same gross salary that was previously sacrificed, but you won’t benefit from the reductions in Income Tax and National Insurance.

We understand that things can change. If you’re yet to have your car delivered and your circumstances change, please get in touch with us as soon as possible. We may be able to cancel your order, but there may be cancellation fees. This is dependent on how close your delivery date is and also on the dealership supplying your car. Different dealerships have different policies.