[rapidaneurism]

I think that this is partly because in Europe taxation is progressive and it quickly becomes quite high. (In the UK £100k-£120k is effectively taxed at 60%+ more if you have young kids)

So there is a point where giving someone 10k take home pay rise costs the business much more than giving a frontline worker a 10k take home pay rise.

But an EV car in the UK is taxed 98% less than the same amount in cash.

Rest zones, work from home etc have 0 tax implications .

Arguably lower paid staff is better off getting the cash instead of the benefits and using it as they see fit

Edit typo

[gmac]

In case that gives the wrong impression, UK marginal tax rates are a ridiculous mess, and come down below 60% again when you earn £125K+.

https://taxpolicy.org.uk/2023/09/24/70percent/

[rapidaneurism]

True! For people with children there is also an effective tax due in the 50k to 60k band because the child benefit gets paid back, and the for the people with young children close to the 100k taxable income the loss of the 30 hour free childcare and the tax free childcare can cause (in expensive places like London) a drop of disposable income of up to about 8k when you declare the pound that moves you from 99,999.00 to 100k.

Under those conditions tax free benefits like working from home (convenience and not having to pay expensive train tickets) can be a nice topping to a modest salary increase when moving jobs.

[midasuni]

The kid tax is at 50k, if you have student loans and 2 kids the marginal tax at 50-60k is 69%, then back to 42% for 60-100, then upto 62% 100-125, then 40% upto 150, then 45% above that.

(Numbers approximate)

[onion2k]

It's also worth noting that £100k in the UK puts you firmly into the top 5% of earners (according to the IFS anyway).

[IshKebab]

Even so, you can't agree that the marginal tax graph makes any sense at all.

[Jochim]

Weren't there changes in the last few years that mean benefits in kind are now treated as taxable income?

I know I recently began paying tax on employer provided health insurance for example.

[rapidaneurism]

Yes but an EV car is treated as a 2% benefit in kind. E.g. (simplifying) your employer can buy you a 40k Tesla and you get taxed as if they gave you 2% of that as salary. In the 40% braket that is £800 benefit in kind so you pay 320 extra tax.

Edit:

I think it is better explained here:

https://electriccarguide.co.uk/what-are-the-benefit-in-kind-...

[em-bee]

interesting, as far as i remember, in germany any benefits towards employees are treated as income and taxed accordingly or even worse, to the point that it is better to pay out benefits in cash only. i think this comes from companies trying to save on taxes by taking advantage of benefits that previously were taxed differently (or not at all)

[bitschubser_]

jep, it gets treated as "gedldwerter vorteil", so it affects your taxable income/social security tax, but depending on the car (E or ICE) and the way you deduct it (driving log, 1% rule, etc...) it can be worth it