Regardless of the size of your business the likely hood is that you require a company vehicle and for some employee it is a make or break perk. Whether you need a van to deliver your manufactured goods or an attractive car to display company image with your sales people, there are a few methods to ensuring that you are reducing the cost of this business expense.

Car Share Schemes

A car share scheme is one of the easiest ways businesses and employees can save on the daily cost of running a vehicle. This is a great way to reduce your carbon footprint, encourage working relationships and save money. The principle is one company car is available to use by a number of employees for company use when needed. If you have a number of employees that only occassionally use their vehicle for company trips then this could be the ideal situation. Businesses must ensure that they have the right insurance to cover employees and the car schedule is monitored closely to make sure that it does’t get double booked.

Another side to Car Sharing is where employees that live close to one another all use the same vehicle to get to and from work. Businesses usually offer salary incentives and flexible working hours to employees utilising this opton.

Salary Sacrificing

This can work out as a great benefit to both the business and the employee. The plus for businesses: There has recently been a reduction in the tax charged to businesses on company vehciles with low emissions (below 120g/km). The plus for employees: When an employee takes a salary reduction because of a car allowance the deduction is taken from their gross earnings. This means the total salary is taken minus the car allowance and the balance is then what PAYE and NI tax is deducted on, ultimately meaning less tax is paid.

The Leasing Option

If your company provides a number of employees with company vehicles then utilising a car leasing option could save you a significant amount of money. When compared to the cost of buying and hire purchase savings can be as high as 50% as well as the added benefit of trading in for a new car every few years meaning you always have cars in great condition. There is also a fantastic VAT tax saving on leasing.