Charge, no charge

I have a client who is leasing a car on behalf of one of its employees. A benefit in kind is showing and the employee suffered the tax charge the benefit charged being in the region of £10 000.

The lease has now expired and the company no longer wants to provide a car to the employee.

The employee wants to take the lease over but has a poor credit rating and is thus unable to do so.

My client is happy to renew the lease in the company name pay the monthly leasing costs of £500 and deduct this from the employee’s monthly net of tax salary. The employee will pay all the running costs of the car.

This all seems straightforward but I am now starting to wonder whether there is still a benefit in kind charge here.

For example could there...