Should the employer provide a company car or should the employee use their own car for business travel?

A common question for employers is on the subject of the provision of a company car, and the issue will typically arise when the employer is negotiating a contract with a new or promoted employee, or an existing employee may be nearing the end of their contract period for a company car and it is opportune to review the options available.

In past years the tax costs to the employee of driving a petrol or diesel company car became, in a lot of circumstances, economically imprudent. However, with the favourable tax treatment for electric and hybrid vehicles there has been a resurgence in popularity of the use of company cars.

Once an employer considers the first year allowances (FYAs) that are available for electric cars and charge points, and the fact that the optional remuneration arrangements do not apply to cars with low emissions, the result can be a very generous package offered at a relatively low overall