Company car tax

Murphy_The_Cat

My thing about telling the IR was from personal experience !  When i got my first company car, I also rec'd fuel benefit (however i was young and i did'nt really understand company car tax too well).  

Unfortunately neither myself or the company told IR straight away and i rec'd a nasty bill for the arrears (no complaints from me, after all the money was due) but it was a nasty shock to my beer money budget that i had to pay 33% extra for what seemed a LONG time until i had caught up !

MarkyMarkD you are right about it not actually costing any more in the long run (and if you are changing an existing company car the changes may be negligible), but with me it's more of a personal thing that i don't like owing money - especially to HMG.

MTC

p.s. Quinny, happy hunting for the car, can i be nosey and ask what flavour car you are looking for ?

vansboy

You may find using your own car, or opting for the personal lease schemes more rewarding.Unless you REALLY need the car for the job & are doing 20k miles +, you MIGHT save, 0or even make a tiny profit!!

All the car makers have special 'clubs' of one sort or another. Worth checking on their www, you'll get regular literature, magazines & special offers. Extended test drives, too. & they all show the specific tax liabilites, for each & every model, they sell.

Or get a van, £500 benifit in kind tax, at least till that new ruling, as mentioned earlier kicks in!!

VB

Quinny_2

Sorry for the delay in replying,I'm currently laid low with a severe chest infection,so the 'puter hasn't been on.

It would seem that our company prefer diesel cars,because my current boss has a Focus,and his boss,has an Audi 1.9td,so it would appear that diesel power will be the order of the day.The only thing I need as an option really,is a tow bar,but I'm unsure if my company will go for this.I need a towbar,as I tow a racecar during the summer.

Failing that,I will be selling my 2 current household cars to buy the wife maybe a Pug 306/307,and will put a towbar on that.

Second point.Yes,we have 2 kids aged 13 and 9,but I didn't know about telling the CTC people,I guess that's something I'll have to look into.

Ken.

Murphy_The_Cat

Hi Quinny

hope the chest infection is claering up.

I've not owned a Ford Focus, but some of my friends have and they tell me it is a splendid car !

Ford are however just about to bring out an updated Focus which is supposed to be even better, but they are offering some cracking deals on the outgoing model.
Ford are currently knocking off up to £3000 from the outgoing model (see link http://www.sky.com/skynews/xml/article/0,,40000-212874,00.html) which means you could be getting a top of the range car for entry level money (but bear in mind company car tax is levied on LIST price not purchase price).

Also Ford do charge a £300 premium on their cars if you want a Euro iv diesel engine rather than a regular diesel.
An example of your tax saving is as follows:-
A 1.6 Tdci Ghia Est list price £16820 x CO2 figure 18% = tax charge of £3027.60 X 22% tax rate = £666.07 tax bill
or
A 1.6 Tdci Ghia Est Euro iv list price £17120 x CO2 figure 15% = tax charge of £2568 x 22% tax rate = £564.96
a saving of £101.11 per year or over £300 if you keep the car for three years.

food for thought

MTC.

p.s. for my calulations i have not checked the tax bandings for the following two years.

p.p.s if you go to Rover Direct you can get some cracking deals on Rover 75 diesels - not as tax efficent as a Ford Focus, but a larger car for reasonable money.

psear

Sorry if this is not in the correct area, as this is my first time on this site.

However, I have a question regarding company car tax. I have just been offered a new job, the job is a salary position, my current position is on an hourly rate. However, the new position also entitles me to a company car, on a personal lease scheme with ALD, the job also offers Bupa and Private pension etc. My question is I am having difficulty calculating, roughly, how much I will my monthly pay will be after all the stoppages, does anybody know of a website or calculator software that can calculate this, or be able to give me a rough guide on what to expect.

Hope somebody can help

Many thanks

Murphy_The_Cat

Welcome aboard psear.

i did a quick search around and i found https://www.times.cashorcar.co.uk that may be quite useful for you.  Also https://www.comcar.co.uk had some decent info as well.

Good hunting.

MTC ;D ;D

p.s. i personally don't have much knowledge of PCP's etc as i prefer good old fashioned straight up HP.

psear

Many thanks for your reply, however am still a little confused since both websites talk about calcultaing company car tax, on the C02 rating, however my understanding of a personal lease scheme is that you only pay tax on the value of the vehicle, could you confirm

Thanks again for any help

MarkyMarkD

You need to also check the exact terms of the scheme. In some case personal lease means a personal lease. i.e. it's your name on the lease, your employer just negotiates the deal. Your employer will then pay you a car allowance  ( taxable the same as salary) or mileage expenses ( potentially tax free) or a combination of both

Whatever the payments from the employer are for, you can claim the costs of motoring as a business expense against your income, probably using the Inland Revenue approved mileage rates.

In other words, if you do 10,000 business miles a year, it doesn't matter if the employer pays you a £4000 car allowance, or 40p per mile - it's still a taxable income of £4000, against which you can offset the approved tax-free mileage rates to get to the net taxable amount.

I would have thought that "personal lease" means "personal lease" - in other words, you are leasing the car in an arrangement sponsored/arranged by the employer. I can't see that "personal lease" means anything else, honestly.

Primrose123_2

cashorcar.co.uk lets you work out what is best for you if you are being offered the option of a company car or a cash alternative. In most cases the cash alternative will work out best if you are doing a lot of business miles and your company are paying you a decent rate. In my case this also allows me to get the car i want, (BM Z4) instead of a 4 or 5 door car that the company wants me to have.

You can also buy a nearly new this way and save a good few pounds in the process. And at the end of say a 3 year loan you will have a car that will be worth something either as a trade in or to give to the spouse.

nearlyrich

ALL diesel cars will carry a 3% surcharge from Apr
2006 -regardless of whether they comply with Euro iv or not, but that a car registered before Jan 2006 will enjoy the waiver for the life of the company car

Just caught up with this thread, I didn't know that any car registered before Jan 2006 is exempt from the new surcharge so I have cheered up as I want to change to diesel to get more mpg. I currently have a 1.8 Audi A3 sport which will be 4 years old in July. That's when I get the new car, I am looking at all the options over the next few months before I have to decide what to order. I do about 40,000 miles per year on business and although I would not consider the car a perk, I don't moan about the tax because I know I can't run even a lower value car on the amount I actually pay. I now pay tax on all but £40 per year because of my £18k (almost 4 years ago) car.