The Benefits of Providing Company Vehicles for your Staff

Having access to a company car is often seen as one of the ultimate perks of the job. Company vehicles can offer mutual benefits to both businesses and employees. However, there are potential drawbacks to consider before you make the leap. It’s worth noting that the type of business is also an important factor in whether to offer vehicles. For example, those with a single, stationery workplace are unlikely to see as many benefits as companies with mobile workers.

With this in mind, what are the pros and cons of providing a company vehicle and what do these mean for business owners?


Of course, the obvious major benefit of company vehicles is that they allow employees to travel. However, this shouldn’t be underestimated, especially considering the potential recruitment effects. Public transport can be unreliable, particularly in smaller areas and access to a vehicle can be transformative for some workers. Not to mention that the company vehicle “perk” itself could help to attract more applicants. With such a saturated market, it’s these unique benefits which can make all the difference in deciding where to work.


An often-overlooked advantage of providing company vehicles to workers is the potential branding opportunities. It’s likely that the car will be seen by countless people and therefore adding a company logo, name or contact information could really help with natural advertising. Even just the use of a company vehicle itself will help to project professionalism, which potential customers will associate with your brand.


Whilst mobile work is a necessary component of many different businesses, it does throw up some important concerns for management. With staff spending so much time out of the office, there is no guarantee that working hours are being kept. The use of company vehicles can provide a solution for this problem with the use of trackers. Trackers provide peace of mind that employees are where they say they are and therefore bosses can get the most out of their workers.

As we have established, as well as a variety of benefits, the use of company vehicles does also have its downsides.


Of course, the main downside of company vehicles is the costs that they incur. A large, upfront cost could be untenable for many companies, particularly those that are smaller and newer. Especially when you consider just how much these vehicles cost, from the sale or leasing of the car, to fuel, maintenance and taxes. For some business owners, this money could be better spent elsewhere.


Another important aspect of company vehicles which must be taken into consideration is that of liability. Each time an employee is given access to a company car and put on the road, the business increases their risk. After all, in the majority of cases, it will be the business and not the worker who is responsible for any accidents. Of course, the purchase of insurance will help to combat this risk but that in itself can be a problem. Company vehicles already incur high costs and when you factor in insurance, which is likely to be high for businesses, these can quickly spiral out of control.


As we have established, there are a variety of factors to consider when deciding whether to offer company vehicles, one of which being taxes. Both the business and the employee will have to pay taxes on a company vehicle. In the case of the employer, this is NIC/Class 1A National Insurance Contributions and for the employee, it’s a BIK or benefit in kind tax. Obviously, having to pay more tax just adds to the overall cost of the vehicle. It also adds to the workload, as relevant documentation and evidence will need to be collected and filed, for HMRC.

Company cars won’t suit every business or every employee but for some they can provide convenience, satisfaction and peace of mind.

Running a business can be extremely difficult, particularly the more financial side of things. The team at Fund Flow can provide a complete financial solution, covering everything from payroll and invoicing, to salary and tax. Don’t hesitate to visit their website for more information.