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Factsheets

Company cars and tax

23 May 2019

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 on the benefit. Employees pay income tax on the benefit but do not pay national insurance. A car's CO2 emission levels can have a significant impact, as can the decision whether to buy, lease or use your own car.


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