What are the Benefits of a Company Car?
Having a company car has long been considered a desirable perk for employees, with the offer of a company still seen as a huge incentive for potential candidates. While for employers offering a company car can be a great way to promote the success of the business, attract the best candidates and boost employee morale.
In this article, we take a look at the benefits of a company car so that you can decide whether a company car is the right option for you.
What is a company car?
A company car is a vehicle provided by a company for an employee to use for business and private use. Company cars are usually offered as a perk to employees who may be required to drive as part of their job.
Pros of a company car
A company car remains a popular incentive for employers and offers numerous benefits:
Cons of a company car
Despite still being seen as a perk there are some drawbacks to having a company car:
What are the alternatives?
If you are still considering whether it is worth having a company car, then why not a look at some of the alternatives to having a company car.
Company Car Allowance
A company car allowance is a cash allowance that is added to your annual salary to allow you to buy or lease a vehicle privately. The amount of cash you receive is usually roughly the same amount your employer would have paid to lease a car for you.
With a company car allowance, there is no need to worry about company car tax rates because the allowance is paid as part of your salary, so is taxed at the normal income tax rate.
The company car allowance is becoming an increasingly popular option, particularly for smaller businesses, as it allows them to offer the perk of a company car to employees without actually having to run a fleet of company vehicles.
Company Car Allowance Pros:
Company Car Allowance Cons:
Only Use a Company Car for Business Use
This one is really down to your employer but can offer a sensible way round employees paying BIK tax. Your employer would provide a pool car for purely business car. This car would stay on the business premises most of the time and only be used by employees for business trips.
It is important to note that to avoid benefit in kind tax associated with a company car, there can be no personal use of a company pool vehicle, this includes an employee travelling from home to a place of work.
Claim Business Mileage
If you don’t travel many miles for business purposes, then the best solution for you may be claiming back business miles.
HMRC set a fuel allowance to take into account the fuel and wear and tear costs of using a vehicle for business purposes. For 2019, this has been set at 45p a mile for the first 10,000 miles and 25p per business mile thereafter.
Is a Company Car Right for me?
Deciding whether a company car is right for your circumstances really is a personal choice, and it’s down to you to decide whether it is the best option for your needs. Let’s face it for most of us it will come down to the money, so a good place to start is to consider which option is the most cost-effective solution for your circumstances.
Here at Stoneacre Leasing, the choice is easy as we have fantastic business and personal leasing offers available. So whether you are looking for a personal deal or a company car deal we’re confident you won’t be disappointed.
View Business Deals