How do I go about ‘buying out’ the benefit of a company car from senior management.
Managers have for seven years had the benefit of a fully serviced company car to the value of £20k + ‘unlimited fuel’bought on a BP fuel card. All benefits (both car and fuel) have been recorded on a persons P11D and the appropriate tax paid by the individual. If the person did not wish to take a company car, a salary enhancement of £6k per annum was an alternative. Business mileage would then be claimed back at 14p per mile. The company now wish to remove this benefit altogether. How do I go about it? what level of compensation should be offered? What time constraints are the norm? I have heard that all a company has to do is give three months notice that it is removing a benefit and hey presto…its gone. Is this correct?
Given that we are talking about senior management and the car is an integral part of their salary package how does this affect their terms and conditions and contract of employment?
Your advice would be most welcome.
Mike Keegan
