Leasing A Company Car

A company car is becoming a popular option for businesses in the UK with leasing a company car growing in popularity as well thanks to advantages for both employees and employers. Check out our guide on leasing your company car below.

There are currently over 800,000 company car drivers in the UK. If your employer offers a company car benefit, why not use your company car allowance to lease a car with Willow Leasing? There are many benefits of leasing a car for both you and your employer so why not check out more about company cars below?

What Is a Company Car?

A company car is a vehicle provided by a company for both business and personal use by an employee. It is usually offered if the job requires a lot of travel but can also be offered by the employer as a perk for working there.

Company Car Tax

You will need to pay tax if you have a company car benefit. This tax is calculated on the value to you of the company car; depending on things like how much it costs to buy and the type of fuel it uses. The value of the car that you are taxed for is reduced if the car is only used part-time, you pay something towards it, or it has low CO2 emissions.

When you first get a company car, you will need to inform HMRC and update your company tax online. If any adjustments occur which change the value of the car, HMRC will automatically update your tax code so that you pay the right tax amount.

HMRC offer a company car tax calculator that helps you estimate the amount of tax you might pay with a certain car – HMRC Company Car Calculator.

Benefits of Leasing a Company Car

  • When you lease a car through Personal Contract Hire, you have to personally undergo a credit and finance check but with a company car, the business you work for undergoes the credit check instead.
  • When it comes to organising the company lease car, most of it is completed by your employer, making the whole process easier for you.
  • Neither you nor your employer have to worry about the depreciation value of the car as at the end of the lease, the car is taken back, and you are free to lease a new one right away.
  • If you choose to lease an electric or hybrid vehicle, your company car tax will be greatly reduced due to low CO2 emissions on your vehicle.
  • You can change your vehicle every 2 to 5 years so there is no need to be stuck with the same vehicle for an extended period. You can choose how long you wish to lease for and at the end of the contract, we can arrange for your new lease to be dropped off on the same day!

Disadvantages of Leasing a Company Car

  • As you are going through your employer, you may not get the choice of what vehicle you end up leasing.
  • The company car tax can be much higher on more expensive vehicles.
  • You will never own the vehicle at any point during the contract. The vehicle belongs to the leasing funder, and you will have to maintain the vehicle to their standards.
  • The car will have to stay with your employer if you ever leave your job.
  • If your employer pays for the fuel that you use for personal journeys, you will have to pay another fuel tax separately.

Any Questions?

If you have any questions about leasing a company car, you can give us a call at 0345 350 3776, send us an email at enquiries@willowleasing.com, or send us a message on our live chat service. If you can’t wait to get started with leasing a company car, you can check out our business contract lease deals here.