Who we are
News
London,
The Department for Education has published new guidance for academy trusts and colleges on introducing Electric Vehicle Salary Sacrifice (EVSS) schemes, setting out the governance, financial and employment considerations organisations must address before offering the benefit to employees. The guidance comes into effect from 1 September 2026 for academy trusts (and 1 August 2026 for colleges) through the updated sector handbooks.
An EV salary sacrifice scheme allows employees to lease an electric vehicle through their employer, with the lease payments deducted from their gross salary. Employees can benefit from tax and National Insurance savings, whilst employers may also realise employer National Insurance savings. However, the DfE is clear that these schemes should only be introduced where the financial and governance risks have been carefully considered and appropriately managed.
If your trust is considering introducing an EV salary sacrifice scheme, now is the ideal time to review your wider reward and benefits strategy and ensure you have the right governance, policies and processes in place before implementation. In particular, trusts should consider:
Whether an EV salary sacrifice scheme aligns with your recruitment, retention and staff wellbeing objectives.
The financial implications for both the trust and participating employees, including the potential impact on pensionable pay, statutory payments and other salary-related benefits.
Whether existing Salary Sacrifice Policies, Pay Policies, contracts of employment and payroll processes are capable of supporting the scheme.
The governance arrangements required, including Board oversight, appropriate due diligence and ensuring any financial risks to the trust are identified and effectively mitigated before entering into an agreement with a provider.
How the scheme will be communicated to employees so they have a clear understanding of both the benefits and any implications for their personal circumstances before making an informed decision.
The guidance also confirms that most trusts will not require DfE approval, provided the scheme has been structured so that any financial liability to the trust has been eliminated or comprehensively mitigated. However, trusts subject to a Notice to Improve, or schemes that expose the trust to financial risk, must obtain DfE approval before proceeding.
If your trust is considering introducing an EV salary sacrifice scheme, now is a good opportunity to review your existing policies, contractual documentation, payroll arrangements and governance processes. Boards should be confident they understand both the benefits and the risks, whilst ensuring employees receive sufficient information to make an informed decision.
Edwin People are available to provide practical advice on the employment implications of salary sacrifice arrangements, review policies and documentation, and support trusts in implementing new employee benefits in line with DfE expectations.