ACCA guide to... company cars and tax

Company cars remain a popular employee benefit. Some company car drivers also receive free fuel for private use. Both employers and employees need to consider the tax implications of company cars before making decisions. Employers will pay class 1A national insurance contributions on the benefit. Employees pay income tax on the benefit but do not pay NIC. A car’s CO2 emission levels can have a significant impact, as can the decision whether to buy, lease or use your own car.