Car benefits for motor industry employees

As we all know, driving can be an expensive activity if done with high frequency. Between the cost of fuel and regular check-ups and maintenance, operating a car can be a significant part of an employee’s expenditure.

For those individuals who work in the motor industry and who might drive a number of different vehicles as part of their job, the costs could quickly begin to stack up.

If you have a contractual right to a company car but have not been allocated a specific vehicle, you are still likely to be subject to the car benefit system.

Car benefits and company cars

Your company car will be taxed as a benefit in kind for most employees, unless you earn less than £8,500 a year or the car is a ‘pool car’ used by more than one employee.

The tax charge is always based on an assumed benefit calculated as a percentage of the car’s list price and its levels of CO2 emissions. The higher the emissions, the more you will pay.

For companies where employees use a variety of cars, either for demonstration, test or other purposes, employers must average together all of the vehicles into a single notional car for each worker.

Car fuel benefits

The fuel benefit is chargeable on the drivers of company cars who are provided with free fuel for private use.

There is no car fuel benefit charged if the employer pays the full cost of all private journeys.

Tax-free benefits

Although you will be taxed for the use of the car and the value of its fuel, there are a number of car benefits that are tax-free:

  • repairs, maintenance and servicing
  • insurance<
  • road tax
  • membership of motoring organisations.

Call us on 01375 383 888 if you need more information or advice regarding car benefits.

You can also fill in our contact form or email



21 Lodge Lane
RM17 5RY

Tel: 01375 383888
Fax: 01375 391672