Company cars

What is a company car?


A company car is a vehicle which a business or organisation gives to an employee. Company cars can be used for both business and private journeys.

Company cars are well suited for employees who need to drive as part of their day-to-day job. They can also be an incentive when hiring employees.

There is no automatic legal entitlement to a company car - it is a matter between employer and employee.

Company cars are treated as a taxable benefit and you will have to pay company car tax.

The amount of tax will depend on:

  • your income tax band
  • the value of the car
  • its CO2 emissions

Types of company car

There are two broad categories of company cars:

  • status cars - for specific grades or positions in the hierarchy
  • essential user cars - for certain jobs including sales, or for drivers who travel more than a certain number of business miles per year

Company car models can include:

  • petrol
  • diesel
  • electric
  • hybrid