Our Company was going to buy a car for an employee as part of his salary package but couldn't get finance for this. However what happened was that
the employee himself got finance and the company is going to pay back the employee the amount of finance he has taken out. ie £300 per month over 24 months
to include interest and capital repayment
This should be part of his taxable earnings, as he'll eventually own the car, I am correct ?
The finance is in the employees name and so is the registration of the car so the company has nothing to do with the transaction in fact
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Being anything other than additional salary.
So if you want to provide the employee and extra £300 in his hand, you will have to work out the gross equivalent of this and add it to his pay.
The employee can claim 45p for each business mile travelled in the car (up to 10,000 miles) and then 25p thereafter.