The Company Car

Abstract

The object of the legislation concerning company cars is to tax an individual on the benefit he derives from having a company car available for his own use. Several years ago the Inland Revenue formed the view that it was impossible to ensure that all individuals who had a company car paid the correct amount of tax appropriate to the benefit attributable to the car. Legislation introduced in 1976 therefore sought to simplify the assessment procedure, while at the same time endeavouring to find a more efficient system, by introducing the concept of flat-rate benefits, almost regardless of the private use made of the car. There have been changes in the scheme since its introduction and for the sake of simplicity only the current provisions are dealt with in this section.