If your staff
ask about ‘Cash for Car’ Schemes,
will you have an answer?
Today, the Company Car plays
a hugely important role in the British Economy:
approximately 55% of all new cars each year are
acquired by Company fleets or Businesses.
Although many company cars
are inevitably ‘tools of the trade’,
they also play a crucial role in corporate culture
and remain important staff motivators and retainers,
help project company image, establish employee
status, and provide mobility.
Company cars also have a
big financial impact on businesses and their employees.
After the payroll they are usually one of the
biggest employment costs for a business, and staff
are taxed on their provision.
But changes to the benefit-in-kind
taxation system have forced the re-evaluation
of the company car.
Your employees may be looking
to you for advice. Do you know what’s best
for them? Should they keep their company cars
or will you offer the option, like many companies,
of taking cash?
This booklet seeks to identify
the key issues companies need to consider when
offering cash options.
Why should we be
considering ‘Cash for Cars’ now?
General awareness about
company car tax issues has never been greater.
It’s being driven by environmentally based
changes to the benefit-in-kind company car tax
with the Inland Revenue Approved Mileage Allowance
Payments (AMAP).
How they might impact
on employees’ tax positions?
The government is committed
to reducing carbon dioxide CO2 emissions in the
UK and the car is considered to be one of the
main sources of this greenhouse gas. The benefit-in-kind
tax and AMAP's form part of an initiative to lower
CO2 levels by encouraging drivers to choose smaller,
more fuel-efficient cars and reduce the amount
of business mileage they clock up.
It is thus vital to
consider if the company car remains the correct
choice for your company – indeed, it may
be worth looking into the broader subject of vehicle
choice and funding methods.
