Teamwork:David Richards, director of County Leasing and Finance, with Scott Gibbs of Liberty Properties.

Tax penalties lead to rise of PCP market Motor Finance Group County Leasing and Finance, the long-established Swansea-based company, has launched a new division to target one of the industry's fastest growing markets.

The company, headed by former Wales and British Lions centre David Richards and a member of the Rothschild Banking Group, has set up County Vehicle Contracts, a new division aimed at the Personal Contract Purchase (PCP) market. PCP agrrements are fast becoming the preferred option for employees who are handing back the keys to a company car because of new tax laws.

"Many companies are choosing to give their current compnay car drivers an option of cash instead of a company car, to allow them to make their own arrangements, and therefore avaoid benefit in kind taxation," said Mr Richards. "Personal Contract Purchase delivers all the benfits of a company car to the private individual, while providing the option to take ownership of the car at the end of the contract." The number of PCP agreements being signed in the UK is rapidly increasing ahead of the next financial year when even tougher tax penalties come into force for company car drivers. The agreements are also being sought by private owners, who are turning their back on the more traditional methods of buying cars, such as hire purchase, bank loan or from savings to more sophisticated and cheaper methods. County Leasing and Finance Ltd was established in Swansea in 1983 and serves the corporate, self-employed and private owner market.

"One of the keys to selecting a PCP provider is to be certain that you are receiving unbiased guidance. This is particularly important for companies wih a fleet of vehicles because the savings can be substantial," added Mr Richards. "Information such as depreciation, maintenance, insurance costs, business and private mileage travelled and the personal tax rate of the employee all have to be taken into account.

"This information is then entered into our financial model and instant comparisons can be made." Under the new regime the biggest losers are likely to be those who currently drive18,000 business miles or more in a year. Currently, they are taxed at 15pc of their vehicle's list price. Under the newregime they will receive no benefit for their high buiness mileage and are likely to be worse off - unless they move to PCP.
PCP can also generate savings for lower mileage "perk" drivers by tailoring finance and benefit packages for drivers and employers.