company car advice

davey9998

hi guys would welcome an opinion on this

im a higher rate taxpayer and can have an Audi A5 2.0T company car if I pay £207 per month towards it and with car tax on top it all comes in at £280 per month ish. This includes running costs insurance servicing etc so its great from that point of view and is peanuts for a nice car. I am 24 also so insurance would be a bit of an issue but as it would be a company car its insured for me. Trouble is I only get 16p per mile which would barely cover fuel costs.

Therefore, would it be better for me to get something like a new shape Boxster for say £16,000 on finance which would cost me around £350 per month but I would need to insure and run the car - I would get 40p per mile which would make me a nice profit if I did 10,000 miles per year.

I'm leaning towards the company car as its hassle free, BUT if I leave the company during the 3 years i have a company car I would have to pay back the remainder of the payments AND lose the car. So if i left after a year i would have about £5,000 to pay to the company AND i'd lose the car.

Any thoughts/suggestions as to which way to go?

cheers

Tozer

davey9998 wrote: »

Therefore, would it be better for me to get something like a new shape Boxster for say £16,000 on finance which would cost me around £350 per month but I would need to insure and run the car - I would get 40p per mile which would make me a nice profit if I did 10,000 miles per year.

I don't think you should see it as profit. Running costs are much higher than simply fuel - think servicing, depreciation...

davey9998

yes, thanks. I know running costs are much more eg servicing and so on but you know what i mean.

any advice either way?

thanks

Tozer

To my mind, given your age and your obvious wish to drive a nice car, I'd go for the company car option.

Don't forget you can get a tax reclaim for the difference between the fuel reimbursement and the Revenue prescribed cost per mile (40p I think)

davey9998

ah, I didn't know about the tax reclaim - please could you explain how i go about that - do I just note business miles and claim the 40p - 16p = 24p per mile back through my tax return (i'm assuming i'd get 40% of the 24p back?)

many thanks tozer
davey

Tozer

I do mine through my tax return - although I get a car allowance of £700 per month so not quite sure it is the same.