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New Department for Education (DfE) guidance has confirmed that academy trusts and further education colleges can offer EV salary sacrifice schemes without seeking prior approval, provided the arrangements are fully cost neutral for the institution.
The guidance sets out a framework for operating these schemes, including measures to manage financial risk such as retaining part of the National Insurance savings to cover early lease terminations, carrying out annual value for money reviews and ensuring clear contractual terms for employees. Staff must also meet eligibility requirements, including remaining above the National Minimum Wage after salary sacrifice and holding a valid UK driving licence.
The clarification is welcome news for BVRLA members offering salary sacrifice schemes, many of whom have been calling for the publication of this guidance. It means leasing companies can now work directly with academy trusts and colleges without prior DfE approval, unless the organisation has been issued with a DfE Notice to Improve, in which case additional approval will still be required.
Members working with education sector customers are encouraged to review the new guidance and consider the opportunities it creates for expanding EV salary sacrifice schemes.
