Car Allowance or Company car

IWantToBeFree_2

If the company is paying for his personal fuel, then he will also be liable to tax on this.

The benefit in kind is £16,900 multiplied by the relevant % (determined by Co2) applicable to the car, and the tax will then be 40% on this. Depending on the % of the car depends on whether this would be worthwhile, could end up costing more especially given he is a higher rate tax payer.

Not to mention the fact that employers are moving massively away from that kind of set up due to VAT changes.

TM1976

I agree it depends on the car, but for the Prius as discussed here the fuel BIK would be £1,610, however the addition tax relief on his mileage would have an expense of 2,400 leaving him £316 up on tax. In addition to this he would get 20,000 miles of personal miles on his employer, this has got to be worth around £2,500.

Depends on the car though, you can't get much lower tax wise than a Prius.