Offering Salary Sacrifice Car Schemes for your employees is an amazing perk, offering discounts of between 30-60% off the price of an electric car lease. At the same time, the costs to your business are zero, apart from a bit of admin work. It’s a win win situation for both employer and employee.
Salary Sacrifice Car Scheme
An Electric Vehicle salary sacrifice scheme allows employees to save up to 60% on the cost of a premium electric car. Monthly lease payments are taken directly from gross salary, resulting in significant savings on PAYE tax, National Insurance (NI) and Benefit-in-Kind (BiK) — making electric cars far more accessible.
Through the Cocoon × Ezoo partnership, businesses can join the scheme at no cost. Employers gain access to our flexible range of premium vehicles, including a strong selection of electric and plug-in hybrid (PHEV) cars, giving employees genuine choice while keeping budgets under control.
The scheme is simple to implement and easy to manage. Our dedicated team handles all administration, ensuring full HMRC compliance while keeping the process completely hassle-free for employers.
Key benefits of our Salary Sacrifice scheme include:
Save 30–60% on the cost of a premium electric vehicle
Flexible and short-term vehicle contracts available
Free setup for businesses
Comprehensive packages including insurance, servicing, breakdown assistance, plus ULEZ and Congestion Zone cover
If you’re ready to enhance your employee benefits package and take a meaningful step toward a greener future, contact us today to get started with salary sacrifice car leasing.
Its as easy as...
1. Choose Your Car
Select from a wide range of electric and plug-in hybrid cars available on a salary sacrifice page.
2. Choose Your Terms
Don't want to commit to 3/4 years? No worries, we can mix our subscription and short-term leases into the mix
3. Delivered to your door
Once the car is ready, we will deliver it to your door or office in England, Wales or Scotland
I'm an employer
Discover how an electric and plug-in hybrid (PHEV) car salary sacrifice scheme can give your employees a valuable extra perk — while helping your business reduce costs and support sustainability goals.
I'm an employee
Find out how much you could save by choosing one of the latest cars through a salary sacrifice scheme — reducing your tax, National Insurance and Benefit-in-Kind (BiK) costs.
How does Salary Sacrifice work with Short-Term Leasing UK?
Salary sacrifice is a highly tax-efficient way to drive a new or used electric vehicle at a significantly lower cost.
Rather than paying for a car from take-home pay, employees agree to exchange a portion of their gross salary for a fully inclusive electric vehicle package. Because the deduction is made before tax, both the employee and employer benefit from substantial savings.
Drivers can save up to 60% compared to traditional car ownership or leasing, while employers also reduce National Insurance contributions. The scheme is fully approved by HMRC, cost-neutral for businesses, and straightforward to implement.
Packages typically include insurance, servicing, maintenance, breakdown cover and road tax, making it a simple, compliant and hassle-free way to drive electric.
Frequently Asked Questions
Please see below a list of our most frequently asked questions about Salary Sacrifice
What is salary sacrifice for cars?
Salary sacrifice is a scheme where an employee gives up part of their gross salary in exchange for a company car. This reduces tax and National Insurance, making it a cost-effective way to access a vehicle, particularly electric and low-emission cars.
Do salary sacrifice cars always require a 3 or 4-year commitment?
No. While traditional salary sacrifice schemes are usually 3–4 years, our scheme can also be paired with short-term car leases and car subscriptions. This allows employees to access vehicles without being locked into long-term commitments.
How does flexible salary sacrifice work with short-term leases or subscriptions?
Employees can use salary sacrifice alongside short-term car leases or car subscriptions, giving them the same tax advantages while retaining flexibility. This is ideal for employees who may change roles, locations, or vehicle needs.
Is salary sacrifice suitable for all employers?
Yes. Salary sacrifice schemes can be set up for businesses of all sizes. The scheme is particularly attractive to employers because the cost to the employer is net-zero, while still offering a valuable employee benefit.
What is the cost to the employer for salary sacrifice?
The cost to the employer is net-zero. Employers typically save on National Insurance contributions, making salary sacrifice a financially efficient benefit with no additional overheads.
What types of vehicles are available on salary sacrifice?
Salary sacrifice vehicles include electric cars and plug-in hybrid vehicles. While both qualify, electric cars usually deliver the greatest tax savings due to lower Benefit-in-Kind (BIK) rates.
Is salary sacrifice better for electric cars than hybrid cars?
Yes. Electric cars offer significantly higher savings compared to plug-in hybrids due to much lower BIK tax rates. This makes electric vehicles the most tax-efficient choice under salary sacrifice.
Who manages the salary sacrifice scheme and vehicles?
The scheme is delivered through a partnership between Cocoon Vehicles and Ezoo, combining flexible vehicle supply with specialist salary sacrifice administration.
Can employees change vehicles during a salary sacrifice agreement?
Yes, depending on the structure chosen. When paired with short-term leases or subscriptions, employees can change or return vehicles more easily than with traditional long-term salary sacrifice agreements.
Is salary sacrifice only available to permanent employees?
Salary sacrifice is typically offered to permanent employees, but flexible vehicle options make it suitable for a wider range of employment scenarios, including growing businesses and evolving workforce structures.
Is your salary sacrifice scheme HMRC compliant?
Yes. Our salary sacrifice scheme is fully HMRC compliant and structured in line with current UK tax and employment regulations. The scheme is administered correctly to ensure both employers and employees receive the intended tax and National Insurance benefits.
Can a company with only one employee or director use salary sacrifice?
Yes. A company with a single employee or director can still apply for a salary sacrifice car scheme. This makes it a popular option for owner-managed businesses and directors who want to benefit from tax-efficient electric or plug-in hybrid vehicles.
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