Pitfall with cars – No 2 – to lease or not to lease

If a company takes out a lease and recharges the expenditure to an employee or director this does not prevent the scale charge for a car to apply.

At best the taxable benefit is reduced pound for pound by the amount that you are reimbursed but you have to structure the arrangement correctly.

Even if you reimburse the full leasing cost you are likely to be left with some residual benefit left in charge to tax.