Tax on cars, how does it affect companies?

[Andy008]

Further to my last question, can anyone tell me how companies are affected by paying tax on company cars?

I have noticed a big increase in the last few years in job adverst offering car allowances rather than fully expensed cars.

Thanks.

[buildersmate]

In the 'old' days, having a company car was a definite tax perk - you paid peanuts for having it in tax. Because of that, companies jumped on the bandwagon, and because of that HMRC upped the tax progressively. In the end it became about cost neutral so companies starting offering it as part of a basket of benefits - have a car or have a (taxable) allowance for not having it.
If you are the sort of person that aspires to a new car every 3 years or so, having a company car may appeal.
I had a company car first in 1985 but gave it up for benefits in 1996. Having the allowance and then using your own car for business miles enables you to claim them at 40p per mile for the first 10000 per year - assuming your company pays that much (which is the max HMRC will allow).