Let’s start with the basics. If an employee or a member of their family or household is provided with a company car, which is available to be used privately, special rules determine the cash equivalent for tax purposes.

If an employee is given the choice between a company car and a cash alternative, the employee is taxed on whichever is the higher of the cash equivalent of the vehicle or the salary foregone.

And this includes any amount foregone with respect to costs connected with the car, such as fuel and insurance. There are exemptions for pooled cars.