Company cars and car allowances are a key component of many employers' reward packages. However, the interaction of employer and employee taxation with the various cost components of providing the benefit is a complex area, leading many employers to operate a car policy that does not fully reflect all costs of operation. The use of tax-efficient methods of policy delivery, such as salary sacrifice or HMRC Authorised Mileage Allowance Payments (AMAP), allows employers to ensure their fleet policies are structured and operated in both a tax and cost-efficient manner. Utilising a structured methodology it is possible to both design and operate policies that allow employers to manage costs and taxation implications, which can deliver employer savings and allow employees to access more desirable vehicles.
