This guidance covers some ideas for tax planning for the provision of cars to owner-managers and their spouses / civil partners. Detailed rules regarding the taxation of company cars are covered in the Company cars guidance note.

For guidance on the VAT implications of purchasing or leasing a car through the company, see the Input tax ― buying and leasing cars and other vehicles and Input tax ― motoring expenses guidance notes.

HMRC provides a company car and car fuel benefit calculator at Calculate tax on employees' company cars.

If an owner-manager or director uses their own car for business purposes, they can be reimbursed by the company without incurring tax liabilities, provided payments are made within the limits prescribed by HMRC. Alternatively, if they use a company car they would pay income tax on the benefit received based on the level of the car’s CO2 emissions and its list price. The employing company will also be liable to Class 1A NIC on the benefit.

The company will usually pay for ownership or lease