Company car tax on lease schemes?

[Mattt]

My mother is joining the car scheme at her place of work, as her current private car is getting a bit unreliable.

She does not currently get an allowance, however they get given a list with the cars and the cost per month (presumably subsidised), which is taken off their salary.

She says she gets charged CC tax on the car, which to me doesn't seem right - perhaps the subsidised amount should be taxed but not the car?

Would the contribution to the lease be taken from nett or gross pay?

[Deva Link]

This sounds like it might be an ECO (employee car ownership) scheme. These schemes can be very complex and some of them are pretty blatent tax avoidance (HMRC is looking at them).

You mother really needs to get details from her employer as it's impossible to guess what's going on.

If she has to make any payment then it will come from her net pay, however if it's a company owned vehicle then the payment does reduce the amount of tax she will pay.

[Eric Mc]

Who owns the car? The company or your mother?

[StuMartin]

If she's going to get taxed, I would expect that the price she pays is taken as a deduction from her net salary (before tax). As such, she may well pay less income tax. Therefore, it seems "reasonable" that she get taxed on it as a benefit in kind, no?

[Mattt]

Eric Mc said:

Who owns the car? The company or your mother?

Sorry, its a leaee scheme - the employer is local government.

[Deva Link]

Mattt said:

Sorry, its a leaee scheme - the employer is local government.

So she should be able to get full details from her employer - I would have expected the information to be very well organised.

Is the car leased to the employer or leased to Mum? Even if it's leased to the employer then her tax is likely to be pretty trivial anyway (compared to the cost of running her own car).

On what basis does Mum qualify for a car? Is she classed as an essential car user and is paid a mileage allowance at the moment? If so, then that will reduce considerably if she's supplied with a car.

[Eric Mc]

OK, they are leased cars and therefore legal ownership rests in the hands of the leasing company.

Who is paying the leasing costs for these cars? In other words, who has the leasing company contracted with - the individual using the car, or the employer?

[stumpage]

Mattt said:

Eric Mc said:

Who owns the car? The company or your mother?

Sorry, its a leaee scheme - the employer is local government.

Mrs Stumpage has one of these. The local government pay £X and she has to pay the difference. the lease is in her name but managed by the local government. It is a bit complex and a way around a tax bill but basically works out that she pays the same in lease costs as she would if they just provided the car and she paid tax on it. But the good thing is you can pay as much or as little as you want depending what your car needs are.