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Should I choose a Company Car or a Company Car Allowance? If you have the choice of a Company Car or a Car Allowance, you should check out how much Company Car Tax (or Benefit In Kind Tax as it is also known) that you would pay if you accept a company vehicle, and then decide whether to go for the car or cash. You could be better off taking the car allowance and leasing a car yourself, even though the allowance is taxable.

Company Car drivers must pay tax on a Benefit In Kind First of all, let’s see how Company Car Tax works. If you drive a vehicle supplied by your employer, you are liable to pay tax as it is classed as a Benefit In Kind.