company car vs car allowance

ceeforcat

I would keep the company car. With regard to fuel, because it is not your car and you are not, therefore responsible for repairs tax depreciation etc. you are allowed a lower rate of tax free payments per mile. Simply put a mileage claim into your employer each month and receive the rate per mile appropriate to your car. No tax payable on these amounts. Just my opinion - others may differ.

leesimpkin

ceefor...the car i have at the min is mine not the companies...sorry if i mislead you...cant think how i am now going to ask for a company car again after 6 years!

is this the best option?

leesimpkin

still baffled!

ok, heres where i am upto!

think i have decided that going back to the company car is the safer option and frees up some much needed money when i sell my 3yr old audi a4 avante soon. (will need some advice when selling it, but thats for later)

so, knowing that i like my nice car, what do i go for next? vw bluemotion makes sense as they have very low co2 emmsions...am i looking at the right thing for low tax? i might sound a car snob but i do like mt a4 that i have right now.

then what do i do about fuel? get a company fuel card again or do i just charge the company?

very very confused

any help would be appreciated

Lee

Kieron170971

Hi,

I have just started working for a company in a permanent role, (not contracting - self employed).
They have sugested that I will have to use my own car from time to time. I agreed on the basis that I would get 40p / mile expenses.
It has turned out that in 2 months I have completed around 1200 miles already.

Most of my contacts are abroad hence no company car but my colleagues who visit people in the U.K. have company cars.

They suggested to me that even though I get 40p / mile I should also get a car allowance, (upto £6,000 / year?).

Could somebody please advise me if this correct.

I do also have the use of my colleagues company cars for one day trips and hire cars for overnights if required or they are long trips.

Thank you,

Kieron.

Smudge6681

Hi - I am looking for some advice RE car allowance V company car.

How do either of the above have an effect on your wages?

Does the car allowance get added to your wages per month then you get taxed on your wages + the monthly allowance?

If you opt for a company car do you get your monthly salary and then a figure is taken off (not sure if you need to pay an amount per month for a company car) then you get taxed on your wages - the company car figure?

I know its all dependant on the age of the car and the omissions etc but i just want to know how it effects the monthly salary

adelekelly

Hi,
I am new and have a query:
I'm about to give up my own personal car with 9 years protected NCB and take a company car but nervous to do this due to insurance if i leave my current job.
Its a new job and i rarely do personal miles and business miles are unknown currently.

Apologies if posted incorrectly.
Help please???
thanks

nellydotcom

The company car offered is a BMW 3 Series no fuel card or a car allowance of £6k. There will be a high level of business miles.

I cant seem to find clear advice to how to work out what I should choose.

The company car seems the right choice?

nellydotcom

Smudge6681 wrote: »

Hi - I am looking for some advice RE car allowance V company car.

How do either of the above have an effect on your wages?

Does the car allowance get added to your wages per month then you get taxed on your wages + the monthly allowance?

If you opt for a company car do you get your monthly salary and then a figure is taken off (not sure if you need to pay an amount per month for a company car) then you get taxed on your wages - the company car figure?

I know its all dependant on the age of the car and the omissions etc but i just want to know how it effects the monthly salary

The allowance is additive to your salary, therefore it will be taxed as if it's a pay rise.

The company car is taxed as a benefit, and will come off your salary.

eg. pay £30,000 + company car allowance (£4000) = £34,000 salary and is taxed accordingly.

A company car, eg, pay £30,000 and the car is seen as a benefit and will have a cash value and that value is taxed on. for example your company car could cost you £200 per month in tax. so £30,000 - (12 x 200) £27,600 which can be seen as a pay cut compared to the allowance. But with the allowance you will need to pay for everything including the car,fuel, maintenance, tax, insurance etc.

Company car covers these costs.

The trade off is in the ratio of business miles and personal miles. larger the business miles, the closer the favour leans towards the company car... the more personal miles leans towards the allowance.

Dont forget that with the car allowance is only there while you are in that employment contract. You could lose your job and have to sell the car, at a loss (depreciation of value). With the company car... you just hand it back.

Though choice!

adicosuk

Sorry, I have read all the posts and I think everybody is missing a big chunk (or I dont understand this topic . Let's say over a 3 years you compare company car vs car allowance - yes, the company pays for everything, but at the end of the 3 years you own nothing. With a car allowance you pay for a car, but in 3 years your car is worth something fairly decent. And if you buy a 1-year old car which still has warranty on it, for 2 years you don't pay maintenance bills or even MOT !

I will give you my example, my company gave me the choice 2 weeks ago, I put everything in Excel and over 3 years I am £9k better by taking car allowance vs company car, taking the following into consideration:

- £6.6k car allowance
- buy a £15k car which in 3 years would be worth £8k-£9k. Car tax would be £182 per month
- doing 10k business miles and 10k personal miles per year (15p for company car and 45p for car allowance paid by my company)

So basically I would slightly better off in 3 years for the running costs, but I will have the car worth at least £8k, which I can sell and get the money

Did I miss anything here ?

robinspain

Hi
Ive just been offere a new deal with regards my company car and im getting a little confused so hoping someone can halp me out.
Ive been offered a 5k yearly company car allowance, paid monthly along with my salary, and then 15p per mile fuel allowance.
Looking at the HMRC website, there is mention of a 15p allowance and also a 45p allowance.
Am i right in thinking that the 15p allowance is for a company car, and the 45p allowance is for people who take the car allowance??

Thanks
Rob