A further structure involving the provision of a car by the employee is an affinity scheme, whereby the employer makes arrangements with a supplier to make cars available to individual employees.
At its simplest, the employer merely acts as a conduit to introduce employees to the car supplier and as such they are generally offered to employees who have no company car entitlement.
“Usually promoted by contract hire companies, affinity schemes can provide an additional benefit to employees through better discounts than may be commercially available from dealerships as a ‘walk-in’ customer,” explains Jackson.
- Pros: vehicles offered at no cost to employer; easy to administer; and potential tax savings.
- Cons: needs to be set up correctly to avoid HMRC risk; and pricing needs to be right to ensure employee benefit.