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 new unused zero-emission 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