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11 May 2016
A company car is something that can benefit both employers and employees, provided you plan accordingly. Important questions to ask yourself are:
These are all things you must take into consideration before making a final decision. The following guide provides the essential information you need to know when planning a company car scheme and the effect it will have on your tax bill.
If carefully planned and effectively managed, you can cut your employer national insurance contributions (NICs) and claim capital allowances that will reduce your taxable profits.
But the advantages go beyond just the financial. Offering cars to your employees can be a low-cost reward, a company perk that not only boosts morale amongst your existing workers but enhances your strategy for recruiting new employees.
2 things must be taken into consideration when deciding which cars to include in your scheme. Firstly, it must be fit for purpose (although your employees may like the idea, no Lamborghinis or 1957 Ford Thunderbirds). On a more serious note, it's important that you ensure that your vehicles will be able to meet the needs of your employees. If you're thinking of going second-hand, it's imperative that the car is in working order, has no defects and will not require extensive maintenance in the near term (merely being "roadworthy" is below the minimum requirement).
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