A company car is a car that your employer provided for you to use. You can normally use it for both business and personal use.
A company car is subject to company car tax, also known as Benefit in Kind (BIK) tax. This is based on the CO2 emissions of the vehicle, the P11D (vehicle value) and your personal tax band. You can see our full guide on this here.
If your company car is leased, then the finance will be in the business’ name so there is no financial risk for you personally.
The BIK you will pay is usually a fraction of the cost you would have had if you had taken out the lease personally.
If you have a company car any servicing and maintenance costs and your insurance will usually be covered by your employer as well.
As you do not own the car you will not need to worry about the vehicle value depreciating and having to sell it when you are ready for a new one.
A company car is usually updated every few years, especially if it is a lease vehicle so you will be able to get the latest models.
As the car is provided by your employer they are the ones who can set restrictions on the vehicle. This includes the models you can select from, and if it is on lease then the terms of the lease, for example the mileage allowance, maintenance level and length of contract.
If you have a company car then you will need to pay BIK tax. You can find out more information about this in our Guide to Company Car Tax.
The BIK rates are more expensive on higher value vehicles and are based on the vehicle’s P11D value, which includes any additional options that you have added.
If fuel is included with your company car package, then you will have to pay company fuel tax as well. We’ve put together a Guide to Company Fuel Tax to help explain this if you want a little more information on the tax before you decide if you want to accept fuel as part of your package.
If you change employment, then the car will stay with your current employer.
Your business may offer you a car allowance, which is a cash payment, rather than a company car. Take a look at our comparison of the two to help you decide which is best for you.
If you want to find out more on the great business offers we’ve got then check out our best deals here or give us a call on 03302210000.
Check out one of our helpful guides or our explaination of leasing to get all your questions answered.
You can unsubscribe at any time
