Company Car / Car Allowance Questions

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  • jimjames
    jimjames Posts: 17,619 Forumite
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    edited 17 March 2017 at 1:16PM
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    gingerdad wrote: »
    Christ 10p barely covers the fuel costs.

    Op : you need to check what mileage rate you can claim as with your mileage you should be quids in (you should be able to claim £11,000) towards running costs on 40,000 miles.

    It's only meant to cover fuel cost. Check HMRC rates, casual user rates are far higher than company car drivers.

    https://www.gov.uk/government/publications/advisory-fuel-rates/how-advisory-fuel-rates-are-calculated
    Remember the saying: if it looks too good to be true it almost certainly is.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
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    jimjames wrote: »
    It's only meant to cover fuel cost.
    Exactly. The allowance is meant to cover the rest.
  • k3lvc
    k3lvc Posts: 4,174 Forumite
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    jimjames wrote: »
    You can claim difference on your tax return though


    No you can't - unless things have changed this year you can claim tax relief on the difference. Assuming the OP worked on the same model as you then 20% of 35p per mile - a far cry from the 35p per mile you're suggesting
  • DoaM
    DoaM Posts: 11,863 Forumite
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    I suspect that Jim meant the same thing but didn't express it as such.

    You claim business miles off the company at the agreed fuel rate (I think it's 11p per mile for us), and then you can claim tax relief on the difference between HMRC rate and what the company has already given you.

    So for the OP it would be marginal tax rate (e.g. 20%) of 45-10=35p for the first 10k miles, then 25-10=15p for the next 30k miles.

    Company pay: 40k x 10p = £4,000
    Tax relief 1: 10k x (35p x 20%) = £700
    Tax relief 2: 30k x (15p x 20%) = £900

    Overall = £5,600 ... £4,000 up front (i.e. as claimed on expenses) and £1,600 in tax relief.
  • jimjames
    jimjames Posts: 17,619 Forumite
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    DoaM wrote: »
    I suspect that Jim meant the same thing but didn't express it as such.

    Yes, apologies, quickly typing on the phone didnt make it very clear.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • jonesy103
    jonesy103 Posts: 23 Forumite
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    Sorry but I'm about to jump in here and hijack this thread but at least it's a related question :)

    Company car vs car allowance – HELP !!

    I currently drive a three-year-old Citroen C4 Picasso THP 155 company car (petrol) with all expenses paid (private mileage included) and I pay tax at 40%. I’m trying to work out if I would be better off by asking for a company car allowance rather than take the car.

    How much does my current vehicle actually cost me in tax, is it 40% of the sum of the car benefit (£4118) and fuel benefit (£5876) currently shown on my latest tax return ?

    If I were to opt for a car allowance in place of the vehicle what would be a good figure to start with when negotiating the allowance assuming that the car is replaced every four years ? There has been no negotiation yet regarding the type/style/age or size of the car.

    What’s your advice on claiming fuel for business mileage and how do I insure a vehicle that isn’t used just for S,D&P but includes an element of business use ?

    Our company has traditionally purchased vehicles outright but there now seems to be a leaning towards leasing. Is there any benefit to me either way or is this purely a financial issue for the company ?

    Citroen C4 Picasso THP 155 with all private and business expenses paid (petrol etc.)

    List price of car £16,995
    C02 Emissions figures 139g/km
    Engine capacity 1598cc

    2017-2018 tax figures – tax code 169T
    Car benefit - £4418
    Fuel benefit - £5876

    2016 – 2017 P111D Value - £16,995
    Cash equivalent of car - £4078
    Cash equivalent of fuel - £5328

    Estimated business mileage per year – no more than 10k max. (probably a lot less)
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