A new Driving Loyalty Through Electric Cars report from Tusker reveals that 46% of UK employers offering car allowances have no visibility over how funds are spent, while 30% admit only a minority of staff use allowances to finance a vehicle. This lack of oversight on employees’ personal vehicles—known as the “grey fleet”—creates compliance, safety, and emissions-reporting challenges.
Hidden Costs and Compliance Gaps
Without structured schemes, organisations cannot ensure grey fleet drivers hold valid insurance, pass licence checks, or maintain roadworthy vehicles, leaving them exposed to legal and duty-of-care failures. Unmanaged mileage expenses can exceed £1.5 million annually, and obscure accurate Scope 3 emissions tracking critical for corporate sustainability goals.
“When employees drive for work, whether in a company vehicle or their own, employers have a clear legal duty to manage that risk. Too often, basics like insurance, licence checks, and vehicle condition fall through the cracks. Taking a more structured approach helps organisations stay compliant, protect their people and make smarter decisions about how business travel is managed.”
— Cheryl Clements, Head of Business Development, Tusker
Shift Toward Salary Sacrifice EV Schemes
Employers are increasingly adopting salary sacrifice car schemes—especially for electric vehicles—to replace ad-hoc allowances. These programmes offer predictable monthly costs, tax and National Insurance efficiencies, and full fleet management. In Tusker’s survey, 38% of organisations cited NI savings as a key motivator, and 47% said they reinvest those savings into staff benefits.
“As grey fleet costs rise and pressure grows to meet climate targets, employers need better tools to manage business travel. Salary sacrifice provides that structure. It’s transparent, predictable and genuinely benefits both employer and employee”, added Clements.
NHS Trust Case Study
Leeds Community Healthcare NHS Trust launched a subsidised salary sacrifice scheme in November 2024, targeting a £1.5 million reduction in annual mileage reimbursements. With a £113 monthly subsidy, lower-paid Band 4 staff can access fully maintained, insured vehicles. Over 1,000 employees were eligible at launch, driving early uptake, improved financial wellbeing, and reduced emissions.
“We know that there are a lot of NHS workers who need a car, not least those working in the community or living in rural areas. The salary sacrifice scheme we have in place with the subsidy included, offers a chance for employees to access a car who previously would not have been able to, particularly those in lower pay brackets.”
— Harriet Jones, Sustainability and Environmental Manager, Leeds Community Healthcare NHS Trust
“The scheme also provides flexibility and considerable tax savings for individuals as a salary sacrifice car includes insurance, maintenance and lifestyle protections which many personal leasing options don’t. It also means that we have total peace of mind that our duty of care is covered, so if the worst should happen, our employees and the Trust are protected”, added Jones.
