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Company cars


Produced by a Tolley Employment Tax expert
Employment Tax
Guidance

Company cars


Produced by a Tolley Employment Tax expert
Employment Tax
Guidance
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Introduction

Company cars are one of the most common taxable benefits. The rules for calculating the benefit are complex, and the reporting requirements are more onerous than most benefits. Company cars are covered by very specific legislation.

Detailed guidance on each of the following sections to cover specific circumstances is available at Simon’s Taxes E4.625, from HMRC at EIM23000 and within HMRC’s 480: Expenses and benefits ― a tax guide, chapters 12–16.

If the employer provides a cash alternative to the provision of a company car, this is subject to tax and NIC in the same way as salary.

Scope of the company car benefit tax charge

When does a car benefit charge apply?

A taxable benefit arises on the provision of a company car by an employer to an employee (or a member of their family or household), where that car is available for non-business use. These rules apply where the employer owns or leases the car and allows the employee use of the car.

What is included within the car benefit charge?

The car benefit

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  • 21 Mar 2025 08:32

Home/ Tolley Tax Guidance/ Employment Tax / Providing benefits to employees

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