company car vs cash allowance

bp1234

i am trying to decide between a company car and cash allowance. currently on cash at £4750, company car offered has BIK value of £2833.

I am on a base salary of £36k, with bonus forecast of £8650 plus medical BIK of £750, plus either car or cash as above.

how do i work out what is the best from a tax point of view. Another thing is that my personal circumstances mean that the car would stay at work all week so i would not really get any benefit from private use.

I am also conscious that i am close to 40% tax bracket bonus dependent and do not want to lose child benefit 2013.

Help please!!!

Thanks in advance.

bp

nearlyrich

Whether you take the money or the car, if it pushes you into 40% you will lose your child benefit. Think about how much tyres, insurance etc etc might cost you for your own car, what happens when you need a service can you affford to fork out £200+? I know you get tax relief on your business miles but you have to fork it out first and if your whole finances depend on keeping your child benefits I wonder if that would be a problem for you?

I have done both and the faff of claiming the tax relief is far outweighed by the convenience of driving a fully expensed company car....

bp1234

Thanks, certainly got me thinking. Do you know, am i right then in assuming i would be taxed more for the company car? am just trying to work out how much.

The whole child benefit thing isn't major really at the moment, it's a year or so away and really if I have it stopped then that's life I suppose. I just want to make sure i'm making the most of everything else and the right decisions at the moment as the company car would stay at work for most of the week as its cheaper and quicker for me to get the train to work.

thanks
bp

nearlyrich

Do you really need a company car? Can you use a pool car if you need to go somewhere for work that's not accessible by public transport?

You can call the tax office with details of the car etc and they will tell you how mich tax you will pay