Car benefit tax help please

beckysbobbles1

I'm not sure if this is the right part to post but my husband has a company car and a fuel card. I understand this is a benefit in kind.

He has decided he want's to 'op out' of being able to use his car for personal use so it would change to strictly business use (he is a mobile engineer).

Would his tax change dramatically as he is under the impression that he pays about £3000p.a. for this benefit.

He now wants to buy a personal car to use but I want to ensure this will be the cheaper option considering the cost of the car, tax, MOT, insurance, petrol, seriving etc etc

Any help or guidance will be greatly appreciated. He is a basic rate taxpayer.

Hammyman

You do pay tax for personal use. It is cheaper to use a company car for personal use. A decent car will cost what he is paying in tax. Insurance, MOT and road tax are likely to work out around £700 a year. Servicing is another £100-£200 a year depending on the service. £100 a year for tyres if you do average mileage. So if you do around 10,000 miles a year you have £1k in running costs even before you've put fuel in the tank and that does not take into account depreciation of the value of the vehicle. Fuel alone for a car for 10,000 miles based on 40MPG is £1500.

beckysbobbles1

Thanks for the reponse. I understand the actual running costs of a car but what I'm trying to work out is would you still pay tax for a car even if you only use it for work?

He doesn't have a choice about whether he uses a car or not as he is mobile. Will his tax change at all?

nannytone_2

i understand that his job is 'mobile' but foes he have a base@ for example, my husband is a mobile worker and only goes to his 'home depot' once a week to put his time sheets in, but this is still his work address. it is 40 miles away from home, and all his working milage is calculated from this place.
if he didnt have persona use of his company vehicle, all mileage to and from this point would have to be paid for by him.

Caz3121

There are different options depending on what his company offers
He may be able to take an allowance instead of a company car and use his own car for personal and business (and claim business mileage)
He may be able to hand back the car and ask to use a pool vehicle (which he cannot take home) for the business miles

however it is likely that his company car is on a lease so probably cannot do anything until the lease is up and he is unlikely to be able to change part way through the lease