Change of Contract & TUPE

cpb353

getmore4less wrote: »

Not clear what tax band. whats the salary?

A company pension, where the employee contributes 3% and the employer 1%. I dont have a pension at the moment so would be a good benefit I think, although the company contribution is only £320 per year based on my current salary

That does not look right £320 based on 3% is £10.66k
whats the real numbers

Anyway lets assume you are 20% tax band.

You are currently taxed £1715.

£3k Allowance will be taxed at 20% and NI at 12% £2040 net.

So you will have £3755py to run a car.
Supplimented by business miles @ 40ppm. about 25p after fuel costs @ 10k thats another £2500 tax free

So well over £6k to run a car for a year

Should be relatively easy to do it for less unleass you are doing a lot of private miles.

The other option you have is to refuse the car allowance not run a car and say they will have to provide transport for business use.

Thanks again

I contribute the 3%, they contribute the 1%. I earn around £32k, which makes their contribution £320 per year.

I do understand that a private car and car allowance over the year may be better financially, but if come the end of the month I don't have the money to put fuel in my car, this is my fault. It is more that I cannot afford to run my own car right now. . .:(

DVardysShadow

cpb353 wrote: »

... The point is that I don't want to own my own car and all the fun that goes with it. I like the reassurance that if it breaks down, it gets fixed. if I need tyres, they are replaced, and I dont have to worry that come the end of the month I dont have enough money to put fuel in the car.

The other issue of course is lets say I take the car allowance and get a car, and then in 6 months I am made redundant. Right now, I give the company car back and it is done, whereas with an allowance I would need to keep up the payments. I know I can get cover for this sort of thing, but I currently drive a VW Passat company car and would struggle to even get a Smart Car for less than £250 per month!

This is not meant to be a rant, but the financial hardship owning my own car would have is very big.

In your position, I would tell the employer that there is no car available. This carries the risk that you could be shoved closer to the exit door.

I would agree with most of SarEl's advice, but I cannot see that it is reasonable for the employer to demand that you get a car - although you do need to cover the point that you need to be able to get in work without the company car.

jazzyman01

Usually there is some period of flexibility. When is you car up for renewal - have the Company advised the car will go then or in 10 weeks etc? There are so many deals in the market now with personal lease cars that cover maintenance too.

So many companies are moving away from company vehicles because in a downsizing market they were left with too many leases (ie costs) so it makes sense to them to minimise their risks.

You are being paid for your fuel - so the issue of no fuel in your car should be a non-starter. I would clarify when you will be paid for expenses and if this is going to cause a hardship, discuss an interest free loan to be paid back over 3 months or so to help you with the first month of costs.

getmore4less

cpb353 wrote: »

Thanks again

I contribute the 3%, they contribute the 1%. I earn around £32k, which makes their contribution £320 per year.

DUh I read it the wrong way round.

I do understand that a private car and car allowance over the year may be better financially, but if come the end of the month I don't have the money to put fuel in my car, this is my fault. It is more that I cannot afford to run my own car right now. . .:(

Don't lease thats a crazy it overcommits.

if you change to allowance you immediately have £313pm to fund a car.
+ the excess from business miles

You seem to have cash flow issues do you also have debt/credit that would make a loan an issue?

cpb353

getmore4less wrote: »

Don't lease thats a crazy it overcommits.

if you change to allowance you immediately have £313pm to fund a car.
+ the excess from business miles

You seem to have cash flow issues do you also have debt/credit that would make a loan an issue?

Not really a debt issue, more that my income and current expenditure are so close that I do not want to commit any more.

It is more of an issue of no payrise for a number of years and the cost of everything going up - only yesterday my electrcitiy company (already one of the cheapest) wrote to me to tell me my DD was going up by £12 per month!

k3lvc

getmore4less wrote: »

I would look at the car situation properly do a full cost analysis

many find the allowance + mileage works out better for average mileages.

Whats the current lease allowance.

whats the car/fuel tax

Also point out that 40p is no longer a realistic amount with current fuel costs


Might be worth consulting/negotiating a lump sum compensation for the transition to help buy a car. but you would need to present real number showing how much worse off you are.

Don't forget to factor in that as well as the car allowance (albeit taxed) - you'll also 'save' the BIK you're paying on your current car and fuel.

The 40p is a limit - above that you'll be taxed on the mileage allowance. If they'll actually give you 40p then its better than many who'll give you 15-20p and leave you to claim tax relief on the difference from IR.

have-hope

Just to balance it - company car's are less prevalent and allowances are favoured. I always had company cars and when I left employment it was a struggle to buy my own car however I don't think I would go back to company car as whilst it's highly convenient you are effectively paying to rent a vehicle. I bought a car a few years old and never had issues, most cars are now very reliable.

If you are rated highly in your job you are more likely to be able to negotiate - one idea is to ask for some transition funds (either a give or loan) so that you can move to new contract.
Sadly employers can impose a reduction in terms, it's happening across the board and the only option is to seek another job. Length of employment offers you no favours either as employers don't seem to value length of service - indeed you are more expensive in the event of redundancy.

SueC_2

k3lvc wrote: »

The 40p is a limit - above that you'll be taxed on the mileage allowance. If they'll actually give you 40p then its better than many who'll give you 15-20p and leave you to claim tax relief on the difference from IR.

I thought the HMRC rate went up to 45p this year?

PaddyPaws

SueC wrote: »

I thought the HMRC rate went up to 45p this year?

Looks like that is correct, here's the linky for hmrc rates for 2011

http://www.hmrc.gov.uk/paye/rates-thresholds.htm#8

PP

cpb353

My mistake, I did mean 45p and not 40p per mile.