geet_kunal

HI, I am thinking to work out if it more cost effective to give a company car to an employee or give them a pay rise,rent the car, and take the cost out of his salary.
Would this still be a benefit...

scoopy301

It would benefit you as by deducting the amount paid by you in purchasing the car, increased salary and other benefits from your income help to reduce the tax

willyoumind

In order to avoid expensive car taxes, why don't you spend some times and scouring the auto companies that provide lower car taxes?

reviewer

This would depend largely on your area. What country/locale are you in? In the US, gifts of value can also be taxed, but if the company car remains the company's property, it wouldn't be taxed. It would be a liability, however (e.g. you'd have to fix and maintain it, not the employee).

ToP_Designer

Well, thats a good idea but it will not help them much, you should mentioned from where you are , as Economy is tooo poor all over . reply again from where you are .so that we can help you.

MilitaryGirl

Well I think you are on the right track however you need to find out if the employee is ok with this. You can't really give someone a pay raise and then in turn tell them that is to pay for the car the company is giving you cause really there is no raise. But I do agree that if you keep it for the company it is a liability which you will be resposible for. However if together you and the employee decide the car is beneficial to both I suggest you buying the car therefore it being cheaper and the employee must have the equal payments deducted for the automobile. So in the end you are not responsible for the automobile and any damages or wear and tear that may be done to it.