ESRI UK is a software mapping and analytics firm based in Aylesbury in Buckinghamshire. One of its guiding principles is to offer greater sustainability to its clients.
However, it was missing a trick when it came to its own company car fleet and employees. So it has instigated an ultra-low emission salary sacrifice scheme by leasing company Lex Autolease for its 400 employees, while also encouraging uptake of zero emission vehicles for its company car drivers with a 20% increase in allowances.
How Does Salary Sacrifice Work?
Salary sacrifice is becoming an increasingly popular and highly tax efficient way to offer cars to employees if they are zero emission electric vehicles.
It works like this: you as an employer lease an electric car, with the cost deducted from the employee’s gross salary. Tax in the form of benefit in kind – currently just 1% for EVs rising to 2% in FY 22/23 – and National Insurance Contributions are then deducted from the revised salary, reducing the amount paid to HMRC.
The net effect is the employee pays less than if they had leased the car privately. All costs are wrapped up in the monthly amount, except for the electricity.
The Esri Salary Sacrifice Scheme
Lex Autolease launched the Esri salary sacrifice scheme to staff in June, and since then employees have ordered a wide range of zero emission vehicles, including the Volkswagen ID.3, Audi Q4 e-tron and Tesla Model 3.
Esri reports that it has already seen a 68 per cent reduction in the company’s overall CO2 emissions, with electrified vehicles now accounting for more than 76 per cent of the make-up of Esri UK’s fleet.
To support the greener car policy, Esri has installed 10 on-site charge points at its head office in Aylesbury.
James Garrod, Internal Account Manager at Lex Autolease, said:
We’ve worked with Esri UK since 2016 to understand the business’s sustainability goals and develop electrification solutions to help them achieve their plans. The team at Esri is aligned within our essential proposition to ensure their fleet is efficient, cost effective and fully optimised.
The take-up of fully electric vehicles since the salary sacrifice scheme launched in June has been really encouraging, but our role isn’t limited to supplying more eco-friendly vehicles. Esri is also using our Sustainability Dashboard to access tailored metrics, recommendations and a future sustainability trajectory. Armed with these insights, together we can continually tweak the overall sustainability strategy to ensure it moves in the right direction.
Gary Lockwood, Financial Controller at Esri UK, added:
Reducing our overall emissions by promoting more eco-friendly vehicles across our employee base is absolutely central to our sustainability targets. We deliver world-class environmental software for globally-recognised public sector bodies and private companies, so it’s only right that we remain on the front foot when it comes to our own sustainability credentials.
We knew that launching a ULEV salary sacrifice scheme would need to be cleverly communicated to our employees to be effective, plus a new IT infrastructure to support it. The team at Lex Autolease have helped guide us through every step of the way, hosting a launch event for our 400-strong workforce to explain the benefits and details of the scheme. This was a huge factor in the initial appetite for the scheme, which we hope will only increase in the coming months.