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Round the bend

09 August 2016 / Melissa Malins
Issue: 4562 / Categories: Comment & Analysis
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The tax implications of company cars for owner-managed businesses

KEY POINTS

  • Increased use of personal contract plans enables many to have a new car every three to four years.
  • For the owner manager there is little advantage in transferring a company tax saving to a personal tax liability.
  • A practical example compares the outright purchase of a car with an operating lease.
  • Carbon dioxide emissions will determine the tax treatment of company cars.
  • A comparison of the relative costs of a company car measuired against a cash allowance and personal car purchase.

Down the years there has been much debate as to whether it is more tax-efficient for an employee to take a company car as part of their remuneration package or to purchase their own car. Further is it better for a...

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