Company Car or own with Allowance

AdrianHi

BillScarab wrote: »

Not sure if it's been mentioned but one of the major benefits of a company car is the peace of mind of having no repair costs should anyhting go wrong.

A good strategy when on a car allowance is to buy 6 month old cars, sell them a couple of months before warranty expirey (34 months old) and buy another 6 month old. You always have that no repair cost risk peace of mind due to warranty and it's little different in cost from running a 3 to 7 year old car. Company cash allowance schemes usually put a 5 to 7 (or less) age limit on the car you must have, so you never get to the near zero depreciation age of 7+.

IM

AdrianHi wrote: »

You can claim back 5 or 6 years, it doesn't matter if you change employer but do it ASAP, money better in your bank account and all that.
Contact your local tax office (should be on P60 and may be payslips) and ask them for the previous years P87's.
I've got 5 or 6 P87's for my wife at home waiting for us to have the time to fill them out. :rolleyes:

Right… Forms in the post from the tax man - now another question.

I've heard (famous last words…) that I can claim a rebate against the proportion of the depreciation in my car's value created as a result of the business-related mileage.

i.e. Using the allowance from work, I buy a car for £15,000. I do 10K personal miles and 20K business miles a year.

After a year, my car - with 30K on the clock - is now worth £7,500. If I'd only done my 10K, it would be worth £11,000.

The suggestion is that I could claim against the £3,500 extra loss, resulting from doing my job.

Is there any truth in this - and if so what is the process?

Cheers

IM

AdrianHi

IM wrote: »

Right… Forms in the post from the tax man - now another question.

I've heard (famous last words…) that I can claim a rebate against the proportion of the depreciation in my car's value created as a result of the business-related mileage.

i.e. Using the allowance from work, I buy a car for £15,000. I do 10K personal miles and 20K business miles a year.

After a year, my car - with 30K on the clock - is now worth £7,500. If I'd only done my 10K, it would be worth £11,000.

The suggestion is that I could claim against the £3,500 extra loss, resulting from doing my job.

Is there any truth in this - and if so what is the process?

Cheers

IM

I know nothing about this rule you are referring too. Anyone else?


I wrote on an earlier post in this thread
"unless you do a big (10-20K+) business mileage the most economical and flexible route ends up being car allowance + 12p per mile fuel expenses. Being able to buy nearly new and not paying that first depreciation hit helps a lot too."

Without doing the sums I would guess that you are one of those better off with a company car. I think it's the only way your going to avoid funding the extra depreciation and maintenance of that large business mileage. 20K business miles a year is a lot :eek: .
Calculating which is best is tough with a lot of variables, how bigger car allowance do you get?
When I did the sums for myself I worked out that I needed to be doing over 11K business miles when considering private or company lease of a new car, and as I own the company that would lease the car I would be getting the benefit of the reduced VAT charge (only pay 50% of full VAT) when going through the company.
I only do about 5K business miles so my car is privately owned.

IM

AdrianHi wrote: »

I know nothing about this rule you are referring too. Anyone else?


I wrote on an earlier post in this thread
"unless you do a big (10-20K+) business mileage the most economical and flexible route ends up being car allowance + 12p per mile fuel expenses. Being able to buy nearly new and not paying that first depreciation hit helps a lot too."

Without doing the sums I would guess that you are one of those better off with a company car. I think it's the only way your going to avoid funding the extra depreciation and maintenance of that large business mileage. 20K business miles a year is a lot :eek: .
Calculating which is best is tough with a lot of variables, how bigger car allowance do you get?
When I did the sums for myself I worked out that I needed to be doing over 11K business miles when considering private or company lease of a new car, and as I own the company that would lease the car I would be getting the benefit of the reduced VAT charge (only pay 50% of full VAT) when going through the company.
I only do about 5K business miles so my car is privately owned.

Those numbers were made up. Reality is more like 25K personal*, 12K business

*The folly of a daily Manchester-Leeds commute.

Allowance was the only option for me - I don't think there are any 'company cars' in the old-school sense at my work.

Could have not had £400/month but claimed 'casual' mileage rate of 38p/mile (23p after 10,000 miles).

In retrospect, it may have been wise to not take the allowance - certainly the 12p/mile I get does not even cover the diesel in the tank, let alone any running costs.

AdrianHi

IM wrote: »

Those numbers were made up. Reality is more like 25K personal*, 12K business

*The folly of a daily Manchester-Leeds commute.

Allowance was the only option for me - I don't think there are any 'company cars' in the old-school sense at my work.

Could have not had £400/month but claimed 'casual' mileage rate of 38p/mile (23p after 10,000 miles).

In retrospect, it may have been wise to not take the allowance - certainly the 12p/mile I get does not even cover the diesel in the tank, let alone any running costs.

38p per mile runs cars at the very cheapest end of the scale or family sized cars bought a few year old and run into the ground. It's a con but the HMRC limit is 40p per mile, because apparently it's sufficient for everyone. I cannot find a new family sized car that can be run at 40p per mile - as per What Car costs.

IM

Can anyone give any insight into how long it will take for HMRC to turn around the P87 forms?

Also, how do I calculate what to expect by way of cheque?

You may be able to tell I'm desperate for the cash!