Company car

cajef

DCodd wrote: »

The company have offered her a payoff for the company car.

If they have offered I would take it, wouldn't you?

Which I assume should be taxed.

Ok, but why is she asking how to calculate a financial loss for personal use and how much she can claim there should be no loss as it was not provided for her benefit, surely the company may give an amount that they think is fair but not what she may calculate and think she should get.

Hippychick1_2

cajef wrote: »

I cannot understand why you think you are entitled to compensation for loss of a company car that appears to have used more for your own personal use rather than business use, the car was provided for the benefit of the company not yourself, any personal use they allowed you was a perk and not a right.

Travel to and from work should be at you own expense not the companies, they did not provide you with a vehicle so you could commute to work.

Cajef - travelling to work will still be my expense, I will pay for the fuel. They are compensating for the perk they are removing - a company car which I can use personally. I have always paid fuel costs for my personal mileage. Thanks.

AdrianHi

Hippychick1 wrote: »

Cajef - travelling to work will still be my expense, I will pay for the fuel. They are compensating for the perk they are removing - a company car which I can use personally. I have always paid fuel costs for my personal mileage. Thanks.

HMRC charge benefit in kind tax to company car users for the benfit of having a company car available for personal use because it is part of their renumeration.
Alternative's are the 40p per mile first 10,000 miles 20p per mile there after scheme OR a monthly car allowance (which is just more taxable salary) and fuel expenses typically 12p per mile.

40p per mile is good for a Fabia but people who have to have bigger cars for family reasons loose out a lot on 40p per mile.

Hippychick1_2

DCodd wrote: »

Seems a fair deal to me Hippychick1, is there no one within the company who might give you an idea of what they might go up to or is it a huge company?

It is a big organisation but I am the first one this is happening to! I will be able to give advice to the others now though, so thank you.

Hippychick1_2

cajef wrote: »

Which I assume should be taxed.

Ok, but why is she asking how to calculate a financial loss for personal use and how much she can claim there should be no loss as it was not provided for her benefit, surely the company may give an amount that they think is fair but not what she may calculate and think she should get.

Hi Cajef

This is for the purposes of negotiation.

Thanks, Hippychick1

Hippychick1_2

AdrianHi wrote: »

Ambiente is the trim level between classic and comfort I think (sister and mother in law have older Fabias)
Assuming 10,000 miles a year, 17.5% VAT and including road tax you can lease a 1.4TDI Greeline for £489.98 first month follwed by £163.33 a month for 35 more months (total £6206.53). Thats just from the What Car listed lease deals, you might find better shopping around. You will need to ring around for quotes for your actual mileage but it should be something like 4p-7p per mile more for a car like this.
Blueline seems to be the next trim grade up.
It's about 9p per mile for fuel on this car.
Total cost of use to you if you did 10,000 a year comes in at about £331.31 a month.
I've got the figures for my sister in laws petrol Fabia 1.4 8v Classic '51 plate worth about £1500 to hand and for 10,000 miles a year it costs ger £313.79 a month (saving only £17.52... so many people assume old cars are cheaper). Thats allowing £300 a year for repairs that would be under warranty on a lease car, she pays quite a bit of car tax etc.

Vauxhall Corsa 1.3CDti Ecoflex is slightly cheaper than the fabia to lease at 151.58 a month.

If you want to go down the leasing road shop around for other cars and deals and you might get the price down a bit more. Gives you an idea of what you can get though.

Thanks so much AdrianHi - you have been an absolute star. I will use this information, Hippychick1

Hippychick1_2

Thanks everyone for your help. AdrianHi's figures are incredibly useful as was the idea of leasing and basing compensation on a lease.

Hippychick1

vaio

Hippychick1

Something else to throw in the equation……..

Example figures (but based on AdrianHi post):

Cost for you to lease the equivalent car £140 per month plus VAT = £161 per month

Your company can get the same deal but as they lease lots of cars will get a discount, say 20% which as they can get the VAT back too means the actual cost to them will be £112

You do 500 business miles a month which currently costs your employer just the cost of the fuel 9p per mile = £45

If it’s your car and you claim the 40p per mile this adds up to £200 per month

Adding everything up…

Current cost to your employer is £112 for the car plus £45 for the fuel part of the business miles you do Total is £157 per month

Cost to your employer if they give you enough to lease a replacement car £160 (which becomes £275 with tax & NI) plus the £200 for the miles comes to £475.

I expect I’ve missed some things but on the face of it providing you with a car costs them £157 a month including the business miles.

If they take it off you it’ll cost them £200 a month just to cover your mileage claims and about an extra £275 to give you enough of a salary increase so you can lease a replacement.

Typical accountants money saving idea, everybody looses

AdrianHi

vaio wrote: »

Your company can get the same deal but as they lease lots of cars will get a discount, say 20% which as they can get the VAT back too means the actual cost to them will be £112
...
Typical accountants money saving idea, everybody looses

Good excercise and the company will not be paying VAT but I don't see them getting much of a discount on top. The lease company are probably getting their margin from the volume discount with Skoda since a 10,000 fabia traded in for 5000 at 36 months old (which is optimistic) is 131 a month depreciation.
Doesn't seem to make sense for the company but we cannot count what it costs them to administer all this which they get away from stopping the company cars.
There is probably some book balancing liability reducing issue going on.

40p per mile mileage allowance for 6500 miles a year is 216 a month leaving you about 120 a month to pay. I worked out this Fabia 1.4tdi lease works out at 40p per mile. The Corsa example 38p per mile.
Demonstrates what HMRC customs is prepared to give you tax relief on.

Doing this I've realised my sister-in-law can now break even on changing here '51 plate Fabia 1.4 8v Classic and leasing a new 1.2 or 1.4 TDi. More convenient for her, she hates having to deal with garages for MOT etc. and it's a guaranteed fixed cost. Last time I checked the figures was before the more fuel efficient engines were out and the road tax regime was different so it was not worth the change.:cool:

vaio

Yep, but even if the company don’t get any discount it still only costs them £140 (car lease) plus £45 (fuel costs for the business miles) = £185 to provide her with a car.

If they take the car off her it will cost them £200 a month just to cover the business miles (6000pa to make the sums easy!) and that’s before they compensate her for the loss of the car which if they fully fund it will cost them an additional £275 when grossed up to include tax & NI and more still if she’s a 40% tax payer.

I’d also guess that any saving in admin costs for cars will be offset by admin costs on the mileage claims

As I said I’ve probably missed something but I’ll stick with “Typical accountants money saving idea, everybody looses”