Company car Vs Cash allowance

withabix

Jeff77 wrote: »

Whoa, he's not replying anymore. I have a question, where did you get your number 1 withabix? I'm confused because I got another perspective on that. Just want to clarify things.

I've been doing it for ten years, complete with the obligatory Self Assessment Tax Return, so I know the tax position.

The amount reclaimable is:

1st 10,000 miles: (40p less [employer payment per mile]) x Your tax rate (20%/40%)

Remainder of miles: (25p less [employer payment per mile]) x Your tax rate (20%/40%)

Tax relief is not claimable for journeys to your permanent place of work (except in limited situations, which typically only apply commonly in the construction industry and similar).

The 15p I referred to was specifically in relation to pure dead dopey's example.

GJUK_2

Jeff77 wrote: »

Whoa, he's not replying anymore. I have a question, where did you get your number 1 withabix? I'm confused because I got another perspective on that. Just want to clarify things.

Whoa, yes he is. He's just got up, working from home has its perks.

GJUK_2

withabix wrote: »

I think you are better off sticking with your company car in your case. You will be financially worse off opting out.

Your employer is likely to have restrictions on the car you can have and its age and mileage.

My employer stipluates the following:

Max CO2: 225g/km (was imposed to limit SUVs and gas guzzlers)
Max age: 5 years
Max mileage: 150,000 miles (we are in a high mileage industry)
Servicing: Must be carried out to manufacturer's spec/frequency.
Number of Seats: 4 adults minimum (prevents most sports cars)
10% less car allowance if petrol engine
Proof of business use insurance must be provided annually.

Currently we have no age limit, mileage limit or C02 limit on private cars at our office. Though they "are looking in to changing this".

GJUK_2

Basics are, the car I want, a Volvo v70 T5, which does 30mpg on a good day is going to cost too much to maintain, run and insure to make it worth while.

:mad:

withabix

The benefit of cash over car is becoming increasingly marginal even with a better cash allowance.

Price of fuel, servicing, tyres etc has increased a lot since the 40p/25p relief rate came in, whereas the 40p/25p rate hasn't changed, reducing the 'cashback' benefit.

Insurance costs are increasing again (they came down for a while).

The £ is worth diddly-squat and the over supply of new cars seems to have dried up quite a lot (they aren't manufacturing the volumes they were), hence car prices are rising (especially at the car supermarkets where mine usually come from).

Tax payable on some 'greener' company cars has reduced.

My mileage is very high at the moment - the further away from 10,000 miles you get, the less the benefit per mile overall. I'm doing 35,000 miles per year right now.


I'm actually seriously considering changing back to a company car after nearly 10 years.

The most tax efficient thing to do is change employer every 10,000 miles - the 40p rate starts again (strange but true!!!).