This clause sets out whether you get a car, who pays for fuel/maintenance, and tax implications. A company car is a taxable benefit—in the UK, you pay tax on its value even if you don't use it for personal journeys. For example, a £30,000 car might add £6,000 to your taxable income annually. This is high-risk because: (1) the tax bill can be substantial and comes from your salary; (2) policies often require you to pay for repairs or fuel personally, which isn't always clear upfront; (3) if you leave the job, you lose the car immediately; (4) you may be liable for damage or accidents. A vague clause ("company car provided") hides these costs.
Ask the employer to specify: is fuel included or do you pay? Who pays for maintenance and repairs? What's the car's value (so you can calculate your tax bill)? Request clarity on personal use—can you use it for commuting and weekends, or work only? Ask what happens if you're made redundant—do you keep the car or return it immediately? Request a worked example showing your monthly tax cost. If you're unsure of the tax impact, consult a tax advisor before signing.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause sets out whether you get a car, who pays for fuel/maintenance, and tax implications.
Why should I care about this clause?
A company car is a taxable benefit—in the UK, you pay tax on its value even if you don't use it for personal journeys.
What are my options?
For example, a £30,000 car might add £6,000 to your taxable income annually.
How does this affect small businesses?
This is high-risk because: (1) the tax bill can be substantial and comes from your salary; (2) policies often require you to pay for repairs or fuel personally, which isn't always clear upfront; (3) if you leave the job, you lose the car immediately; (4) you may be liable for damage or accidents.