Leasing a car to an employee

[griffgrog]

We have a company car that is under lease for two more years that a former employee had. His replacement took the cash option. One of our employees has offered to lease the car from us at the same amount that we pay the lease company. Can we do this, or would the IR see it as a BIK? To me it seems simple, we pay lease co £300+VAT, employee pays co £300+VAT
It just sits in the car park at the moment and im sure that can't be good.

[2 sMoKiN bArReLs]

It's at a commercial rate, so it would be difficult to imagine how a bik may arise? (assume they tax/insure/fuel etc it)

[Eric Mc]

No BIK if the lease is at normal commercial rates.

Of course, your business would have to account correctly for the leasing income arising on the lease of an asset (and all the various tax and VAT permuatations that might arise depending on the nature of the lease).

[Moe_Szyslak]

Yeah correct, not a benefit in Kind, he is paying you for a service. You would need to raise invoices for the rentals etc.