Swopping lease car for cash payment

Luv me dogs
Luv me dogs Registered Posts: 5 Regular contributor ⭐
in General accounting discussion
I have two directors, one has a lease car, the other has decided to give up his lease car and run his own car. He wants cash obviously to compensate. Can I put this straight through as extra pay? should it be paid gross?

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  • KernowAccountant
    KernowAccountant Registered Posts: 103 Epic contributor 🐘
    i) Yes ii) No
  • Luv me dogs
    Luv me dogs Registered Posts: 5 Regular contributor ⭐
    Ok, thanks for that. The director with the soon to be private car is looking at the figure paid to the lease company as the amount he will receive. I think we should take into account the reduction in tax code for the other. The car benefit is £7734, cash equivalent is £3518. Am I correct in saying that I can reduce the payment by 3518 x 20% ??
    Sorry, I've not done this before.
  • Luv me dogs
    Luv me dogs Registered Posts: 5 Regular contributor ⭐
    Ok, thanks for that. The director with the soon to be private car is looking at the figure paid to the lease company as the amount he will receive. I think we should take into account the reduction in tax code for the other. The car benefit is £7734, cash equivalent is £3518. Am I correct in saying that I can reduce the payment by 3518 x 20% ?? Sorry, I've not done this before.

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