Company car or Car Allowance?????????????

devonmark

Hi.

I have been given the opportunity to opt out of my company car scheme, but i am unsure if i would be better or worse off!

Does anybody know of a website that calculates how much tax i am paying on my present company car and fuel card?

I know how much i will get for the car allowance and need to calculate how much tax i will save by not having a company car.

Any help would be appreciated.

Thankyou in advance

Mark

JonathanA

there are lots of variables you need to take into account. The cash allowance will be taxable, so you need to work out how much it will be after tax. To work out how much tax you're saving on your company car, you can either look at your P11D to get the taxable benefit, then multiply that by your tax rate to get the total tax payable, or look at something like what car.

I'll bet there are websites that do all that for you, someone will probably advise soon. Don't forget to take into account any restrictions your employer may have if you do opt out about the type of car you can run (does it fit with what you want / budget etc), check out what level of mileage allowance you will be entitled to claim and factor that in, and think about how many miles you do each year - the higher it is the more a car you buy or lease will cost due to depreciation.

stphnstevey

I haven't found a website yet that's any good and doesn't try to guide you into buying a lleasing agreement from them.

I wasn't going to go into detail, but as your from plymouth (where i'm originally from) what I did was:

Total car allowance for year,
take off tax (normally 22%), maintenance (best guess), tyres, road tax, insurance
add on tax allowances (can claim allowance for anything under 40p per mile employer refunds you)
multiply by years want to keep car (i do 3yrs)
add on estimated re-sale over however many years
= price of car you can afford

remember when comparing to company car, you actually PAY tax for this privalage, so to be a fair comparison, take this off the list price.

hope that helps!

joshm_2

I guess it partly depends on whether you (or your employers) think a new(ish) car is required and if you are the type to care for a privately owned car. If I were you I'd take the cash alternative and buy a used car (provided it's a sensible figure). If your employer lets you keep the fuel card to use with the privately-owned car then so much the better. My employer has a lease scheme with a cash alternative and it didn't take many calculations to figure out that you're much better off in the privately owned sector, provided you can put up with the extra hassle.

stphnstevey

For me the mileage I was doing excluded me taking a used car due to fear of the maintenance bills. New cars still need maintenance, but at least you normally get a warranty that genrally covers the period you own it.