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Company Car Allowance (Workings Out Included)

bring1t
Posts: 198 Forumite


in Cutting tax
All,
I am in a similar position to others on this board, Car vs Cash as i have just been promoted into new position. I have used my limited knowledge of the tax system to try and work out the pennies as to which I should do. I know what car I am getting, it is just a matter of which is the cheapest way.
I would be soooo grateful if you could spare a few moments casting your eyes over the following spreadsheet and giving some advice, from what I have worked out it "looks" like it would be best to buy??
Car details are on one sheet, workings on the other. (I am in 40% tax, i think?? Basic 36k)
http://www.yousendit.com/transfer.php?action=download&ufid=C08BCDBC0EB8A050
Thanks very much, Richard
I am in a similar position to others on this board, Car vs Cash as i have just been promoted into new position. I have used my limited knowledge of the tax system to try and work out the pennies as to which I should do. I know what car I am getting, it is just a matter of which is the cheapest way.
I would be soooo grateful if you could spare a few moments casting your eyes over the following spreadsheet and giving some advice, from what I have worked out it "looks" like it would be best to buy??
Car details are on one sheet, workings on the other. (I am in 40% tax, i think?? Basic 36k)
http://www.yousendit.com/transfer.php?action=download&ufid=C08BCDBC0EB8A050
Thanks very much, Richard
0
Comments
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hi
from what i can see you are not deducting tax from the Car option in your calculations - only NI?
is this correct?
If you take the allowance, its subject to tax (40%) NI and Student Loan (if your still paying it off)
this is the scenario I am in - my car allowance is £335 per month or something like that, I calculate I'd get about 1/2 after the above deductions taken out - you cant privately lease the kinda car i want for £160-180 per month....
i do lots of business miles (3x more than private) but i'd rather wear out someone elses car and give them the maintenance headaches than own my own depreciating car again.......
i am not very good at working out what is specifically better than the other, however the Focus is costing you £192+£77 per month - £269, and from your allowance you'd probably get £210-220 after tax and NI.......
how does the mileage work at your company? would you get private mileage paid or would it just be business mileage that was covered?
one other thing - why are you paying a charge for the servicing of the car!? - surely thats part and parcel of the lease cost?0 -
village_life wrote:i am not very good at working out what is specifically better than the other, however the Focus is costing you £192+£77 per month - £269, and from your allowance you'd probably get £210-220 after tax and NI......
You need to add these numbers together to get the true cost. i.e. if you take the allowance you can spend £489 per month before you are worse off.
There are other factors such as tax relief on business mileage to take into account also.
This site is very good at crunching the relevant numbers.
http://www.cashorcar.co.uk/if i had known then what i know now0 -
Thanks for the advice and that web site. To answer a few questions:
- I pay for all my own private milage
- They have split the service and lease charge up but in every lease cost it includes the service charge. For some reason they think i would want to know it!
I have been speaking to some people and my current calculations did not take into account the 5k personal tax allowance. This would make me still a 22% tax payer ( 36k - 5k = 31k), on a 22% tax bracket i the tax calculation would come down to about £95 a month, making it easily the best choice.
It will be expensive for me to lease this car, but the alternative of buying (loan + insurance) would be even more expensive!!
So i reckon i am going for the lease, cause it will be cheaper and you dont have to worry about any damage!!0 -
You can claim back tax relief on all business mileage.
You'll get your tax back on:
40p per mile for the first 10000 business miles
25p per mile for each mile thereafter
So this should really be in your calcs too. Is the 17500 miles business mileage only, or total mileage? In our situation, this actually means that the entire cost of the lease is covered by the allowance and tax relief (ie. it pays for itself)."One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
although the lease says 17500 business miles on it i am not going to do anywhere near this, prob 100-200 PER YEAR. that value is on there because i have the car for 4 years or 70000 miles (17500 x 4) whichever is soonest. So i wont get any tax relief on that.0
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