Leasing for an employee

JohnHaggs

Hi Guys,

One of my employee's who has a poor credit rating has asked me to lease a car through the company for him and deduct 100% of the cost from his wages, is this allowed? If he pays 100% it is not a company car so there shouldn't be any bik payments.

Please help

Car_54

Apart from anything else, what are you going to do when he leaves in a few months time? You'll be stuck with the monthly payments for a car you don't need.

BoGoF

You are wrong about it not being a BIK

caprikid1

BoGoF wrote: »

You are wrong about it not being a BIK

Agreed it almost certainly is a Benefit in kind. At the minimum the difference between the lease and what it would cost him.


By the sounds of it quite a big benefit.

MEM62

JohnHaggs wrote: »

it is not a company car so there shouldn't be any bik payments.

1) You may not be able to convince HMRC about that.
2) How are you proposing to handle the VAT element?
3) Are you happy to have the car sitting around and pay for the lease once the employee leaves. (And if you cannot secure possession of the car you'll be paying for the lease anyway)
4) Assume you are happy to get lumbered with the termination costs once the employee defaults of these.

There isn't one viewpoint from which this becomes even a remotely acceptable risk for your company.

foxy-stoat

JohnHaggs wrote: »

Hi Guys,

One of my employee's who has a poor credit rating has asked me to lease a car through the company for him and deduct 100% of the cost from his wages, is this allowed? If he pays 100% it is not a company car so there shouldn't be any bik payments.

Please help

Tell your employee that he doesnt have a credit rating, low or high.

DoaM

foxy-stoat wrote: »

Tell your employee that he doesnt have a credit rating, low or high.

Everyone has a "credit-worthiness" .. otherwise known as a "rating" (in common parlance). What that "rating" or "score" actually is can only be defined by the individual credit providers (as you are inferring), but the credit reference agencies who generate "scores" at least give a guide to how a credit provider might view someone seeking credit.

As such your post does not help the OP in any way.

System

If finance companies who employ teams of experts to assess risk for lending to people won't lend the employee the money what makes you think it's a good idea.

As has been pointed out if they leave within the lease period what are your plans then?

Ectophile

Do check that, after you've taken out the cost of that car, you don't end up paying less than the minimum wage.


It could be a problem if they leave, lumbering you with a car you don't want, and then sue you for not paying them the minimum wage.

JP1978

Credit checking for PCH isnt as strict as other financing.

You re not financing a 40k car, you are financing the depreciation on a 40k car.

iolanthe07

it is not a company car so there shouldn't be any bik payments.


When I was working I purchased my own car with a loan from my employer. I definitely did have to pay BIK.