Maximising benefit in kind tax

Ian Hughes considers the tax implications of salary sacrifice car schemes

Salary sacrifice car schemes are increasingly popular, driven largely by the tax efficiencies and associated cost benefits. Employees can take advantage of tax breaks, giving up part of their salary and paying less income tax and national insurance contributions. In return they can drive a cost effective, brand new car with an all-inclusive package. The vehicles are classed as company cars, and therefore have their own specific rules and risks that employers and employees need to consider.

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