Should drivers be given a company car or cash allowance?
It’s probably best to offer employees the choice of a company car or cash for car. But company cars, generally, still represent good value for staff. However, there may be certain drivers who have been disadvantaged by the new benefit-in-kind taxation rules. These might benefit from considering cash for car. But each case needs to be assessed individually. There’s no blanket solution. Contract hire companies will offer a Personal Contract Purchase product to support the needs of drivers who opt for a cash option. Personal Contract Purchase (PCP) may also be appropriate for sole traders or partnerships. It’s based on a guaranteed residual value for the car at the end of the contract. At the end of the term, the business can keep the car by paying the outstanding amount, use the value in the car as a deposit for another vehicle, or simply return it.
