When most people think about salary sacrifice car schemes, they imagine large businesses with dozens of employees signing up for electric vehicles (EVs). But what about smaller companies — or even a business with just one director?
The good news is: yes, you can run a salary sacrifice scheme even if you’re the only employee or director of your company.
How Does It Work for a Single Director?
Salary sacrifice is a simple exchange: part of your gross salary is given up in return for a benefit — in this case, a fully maintained electric car. The scheme works the same whether you have 500 staff or just one:
The company sets up the arrangement.
The director agrees to reduce their salary.
The car is provided as part of the remuneration package.
Because the sacrifice is taken before tax and National Insurance, both the business and the director benefit from significant savings.
Why It’s Attractive for Small Businesses and Directors
1. Tax Efficiency
- Directors save on Income Tax and National Insurance.
- The company also saves on Employer National Insurance contributions.
- With EVs attracting a 3% Benefit-in-Kind (BiK) rate until April 2025, the savings are even more appealing.
2. Access to Premium EVs Without the Hefty Cost
Salary sacrifice makes aspirational models achievable for sole directors, including:
- Mercedes EQA – a compact, stylish SUV that’s perfect for city driving.
- Porsche Macan Electric – a brand-new luxury SUV with sports car performance.
- BMW i4 – an executive saloon that blends practicality with premium design.
- Tesla Model Y Performance – cutting-edge tech with exhilarating acceleration.
All of these can be accessed for less than a personal lease thanks to salary sacrifice savings.
3. All-Inclusive Convenience
With Cocoon Vehicles, your monthly cost covers:
Insurance
Servicing and maintenance
Tyres and MOT
Breakdown cover
Road tax
That means no surprise bills and no extra admin.
4. Flexible Options
Unlike many providers that only offer 3–4 year terms, Cocoon offers:
- Car subscriptions — ideal if you want to keep your options open.
- Short-term leases (6–18 months) — perfect if you’re not ready to commit long-term.
- Traditional leases — for those who want stability and maximum savings.
5. ESG and Image Benefits
Running a premium EV through your business demonstrates commitment to sustainability, reduces company carbon emissions, and strengthens your professional image.
Example: A Sole Director and a Tesla Model Y Performance
A director decides to use a salary sacrifice scheme for the Tesla Model Y Performance:
| Cost Type | Personal Lease | Salary Sacrifice |
|---|---|---|
| Monthly Cost | £950–£1,000+ | £650–£750 (with tax savings) |
| Insurance & Maintenance | Extra | Included |
| Benefit-in-Kind Tax | N/A | Minimal (3% for EV) |
The result? The director enjoys a high-performance Tesla at a fraction of the cost, while the business saves on NI contributions.
Key Considerations for One-Person Schemes
Eligibility
The business must be structured so that the director is also an employee receiving PAYE salary.
Impact on Take-Home Pay
Salary must not fall below the National Minimum Wage after the sacrifice (not an issue for directors on higher salaries).
Accounting & Payroll
The arrangement must be correctly documented for HMRC compliance.
Cocoon Vehicles can guide you through the setup to ensure everything runs smoothly.
Frequently Asked Questions
Can a one-person company run a salary sacrifice scheme?
Yes. As long as the director is paid through PAYE, the scheme can be set up.
Is it worth it for just one car?
Definitely. Directors can unlock the same tax and NI savings as larger businesses.
What happens if I stop trading or close my company?
Early termination protection ensures you won’t be left with unexpected costs.
Can directors choose premium EVs?
Yes — Cocoon’s range includes the Mercedes EQA, Porsche Macan Electric, BMW i4, Tesla Model Y Performance, and many more.
Is everything included in the monthly payment?
Yes. Insurance, servicing, tyres, breakdown cover, and road tax are bundled for convenience.
Set your salary sacrifice scheme up today!
You don’t need a large workforce to benefit from salary sacrifice. Even if you’re the only director of your business, you can take advantage of the tax savings, convenience, and prestige of driving a premium electric car.
At Cocoon Vehicles, we specialise in supporting SMEs, contractors, and sole directors with flexible salary sacrifice solutions — including short-term leases and subscriptions that most other providers simply don’t offer.
Need more information? Speak to the Cocoon Vehicles on 01332 290173 or use the ENQUIRY FORM at the bottom of this article for additional details.
