Car Benefits: Personal use contribution?

I am about to take out a company car. However, my company has asked that I contribute £100 towards personal usage (on top of the usual benefit in kind charge). How will this £100 be collected from me? Will it be deducted from my Gross salary before tax or will it be deducted from my net salary?

Answers:
The company could do it either way depending on the agreement, but the usual practice would be for it to be taken from net salary.

This contribution will reduce the benefit in kind charge you are taxed on, but only if it is set up correctly (ie it must be a contribution for car use, not for eg petrol).

However, in the vast majority of cases the abov eanswer is correct - you and the company are likely to be better off with a cash allowance or mileage paid for you to run your own car rather than have a company one provided.
I would tell them to keep the car buy or lease your own and charge the company mileage.
Unlees of course its a very expensive company car which you will pay through the nose for in tax benefit in kind.
See
www.companycardriver.co.uk

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