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Employer non subsidised lease car scheme - Giving employee's the benefit of accessing public sector discounts

Key Features:

  • The employee conducts no business mileage.

  • The employer makes no contribution towards the cost of the lease vehicle.

  • The employee makes a contribution for all of the cost of leasing the vehicle they have chosen from their net monthly salary.

  • A vehicle is typically leased for a 3 year period on a fully maintained basis.

  • The contractual arrangement for the vehicle is between the leasing company and the employer.

  • The employee signs an agreement between themselves and the employer detailing agreement to the quoted monthly net salary deduction in addition to complying with the terms and conditions of the scheme.

  • The employer will typically insure the leased vehicle on a fleet policy in order that they can be assured their liability for the asset is covered and in their control.

  • The driver may be liable to pay benefit in kind tax on the leased vehicle, the amount of which will depend on the price, Co2 emissions of the chosen vehicle and the amount they are contributing towards the car.

  • Similarly the employer may be liable to pay benefit in kind employers national insurance contributions on the leased vehicle, the amount of which will depend on the price, Co2 emissions of the chosen vehicle and the amount the driver is contributing towards the car.


How you choose to structure the cost for the employee is largely at the discretion of the employer however it is important to consider whether making the scheme less financially favourable may mean you do not achieve some of your other fleet objectives. Thought should be given to the following potential costs in structuring quotations alongside the contribution the employer wishes to make to the vehicle:

  • Insurance premium and the likelihood of it increasing over the duration of the lease.

  • Employer National Insurance Contributions on benefit in kind.

  • Output VAT to the employee.

  • Any non-recoverable VAT for the employer.

  • Any contingency fund the employer wants to create to mitigate any unexpected/unrecoverable costs associated with the scheme.

  • Fleet Management administration Fee.

  • Internal administration fee​.

 To View an Example Quotation Please Click Here


 It is key to ensure that the terms and conditions signed by the employee mirror those between the leasing company and employer. Robust T&C’s will mitigate  any additional costs levied by the leasing company being paid by the employer rather than the employee.


Examples of typically additional charges:

  • Rechargeable maintenance costs not covered in the maintenance package.

  • Damage identified when the vehicle is returned.

  • Excess mileage charges.

  • Insurance excess charges.

  • Early termination charges.

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