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Company car allowance
Hi guys,
I'm looking for some help/advice on the economics of having an allowance from your employer to buy a car for work. Currently I have a company car that runs out at the end of Sept and I have the option to take an allowance of £530 a month(£385 ish after tax and NI) instead of a company car. I'm currently paying about £70 pm in tax for my car so this can be added to the monthly allowance.
In addition to the allowance we get 15p per mile from work and the next bit is where I need clarification. I believe that you can claim back upto 45p per mile from HMRC for the first 10k miles and upto 25p per mile for anything above this. So in my case I could claim back 30p for the first 10k miles and 10p for anything over this.....is this correct?
If the above is correct then based on approx 20k miles a year that I cover I would be entitled to about £4k from HMRC at the end of the tax year (is this tax free??.)
I'm a little confused as it seems over a four year period I could well end up with a profit of about £2k a year ( the other £2k going on tyres,servicing,tax,insurance etc) and then have a car at the end of this period...surely I'm getting this wrong as it seems quite a healthy profit!
I'm looking for some help/advice on the economics of having an allowance from your employer to buy a car for work. Currently I have a company car that runs out at the end of Sept and I have the option to take an allowance of £530 a month(£385 ish after tax and NI) instead of a company car. I'm currently paying about £70 pm in tax for my car so this can be added to the monthly allowance.
In addition to the allowance we get 15p per mile from work and the next bit is where I need clarification. I believe that you can claim back upto 45p per mile from HMRC for the first 10k miles and upto 25p per mile for anything above this. So in my case I could claim back 30p for the first 10k miles and 10p for anything over this.....is this correct?
If the above is correct then based on approx 20k miles a year that I cover I would be entitled to about £4k from HMRC at the end of the tax year (is this tax free??.)
I'm a little confused as it seems over a four year period I could well end up with a profit of about £2k a year ( the other £2k going on tyres,servicing,tax,insurance etc) and then have a car at the end of this period...surely I'm getting this wrong as it seems quite a healthy profit!
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Comments
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That 4k figure you calculated is not the amount you'll get back from HMRC, it's the amount on which you can claim tax relief so if you're a 20% tax payer HMRC will refund £800, or double that if you're a higher rate tax payer.0
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That 4k figure you calculated is not the amount you'll get back from HMRC, it's the amount on which you can claim tax relief so if you're a 20% tax payer HMRC will refund £800, or double that if you're a higher rate tax payer.
See that's what I thought but there's a couple of guys at work who are certain they can claim the full £4k, looks like they're in for a bit of a shock!!!0 -
The Employer will win, the scheme will involve them offloading some costs directly on to you.
Transport is the highest expense, employers are looking to offload it and get employees to subsidise the company.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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