new job - Car

bevanoli

Hi Guys,

I have recently started a new job and need a bit of advice in regards to a car. My previous job had a company car and a fuel card for all my personal fuel too.

The boss has said I could take out a contract hire car and still claim back the 25p per mile, he would pay the contract hire into my bank as a car allowance into my bank but its under my name. What is the difference to putting it under the companies name? would i be paying company car tax if its under the companies name?

2latenow

bevanoli wrote: »

Hi Guys,

I have recently started a new job and need a bit of advice in regards to a car. My previous job had a company car and a fuel card for all my personal fuel too.

The boss has said I could take out a contract hire car and still claim back the 25p per mile, he would pay the contract hire into my bank as a car allowance into my bank but its under my name. What is the difference to putting it under the companies name? would i be paying company car tax if its under the companies name?

Based on my experience of 15 years of company & private cares for work...
- What is being suggested would almost certainly be seen as a personal/private commitment - it would be you entering into the contact agreement, so think carefully about the terms (what happens if you crash it, what happens if you change job & no longer need it etc).
- The car allowance payment made by the company to your personal account would almost certainly be counted as income and taxed at your normal rate (so to fully cover the contract hire costs, the company would have to pay more to you - before tax - to cover the cost)
- On the plus side (in my opinion, its a plus) as it's a private vehicle you'll be able to claim 40p/mile on the first 10k miles & 25p/mile thereafter as relief on your tax (less any mileage allowance the company pays you). If your total running costs for the vehicle (fuel, insurance, servicing etc) is less than this then you might be able to make a small 'profit' (depends on your mileage, costs etc).
- Overall, they are transferring all the vehicle-associated risks to you as compared to a fully expensed company car with fuel card.

Do you have to take the contract car option? Have you considered buying your old vehicle from your old company or buying a decent 2nd hand?

Of course contract hire means you drive a new car, but a 2nd hand, well managed, could probably be cheaper.

I'm sure someone officially knowledgeable will be along soon and can correct any mistakes...