Salary sacrifice for cars is seeing a resurgence as low benefit-in-kind tax rates for electric vehicles is making an economically attractive option to employees and employers, says Deloitte.

Under the funding method, an employee sacrifices a proportion of their salary before tax and national insurance is applied in return for a fully-funded car, with maintenance and insurance also included.

This has the potential to save drivers thousands of pounds a year compared to funding their own vehicles through a personal lease, while employers can also make national insurance savings.

However, the funding method had been declining in popularity since 2017 when the Government introduced the optional renumeration arrangements (OpRA) legislation, which effectively removed its tax and NI efficiency as it meant an employee would be taxed on the greater of the value of the benefit or the salary they gave up.