Going BR Company Car vs Car Allowance

whatdowedonext

Dear All

We have had our decision made for us we had a letter from our old Mortgage Company asking for our proposals on paying the o/s £50,000 after our house was repossessed and sold. They have said they will either Petition for Bankruptcy or take legal action to have payments towards the debt deducted directly from my OH salary or instruct a debt Collection Agency. The other option was go after our assets (we only have a car which is used as a company car).

So we got in contact with StepChange and they have recommended BR.

I have a question, my husband has a car allowance is it best for him to go back to a company car? The reason I ask is that it's a little bit older and therefore is a variable cost ie repairs, maintenance etc.

I will be putting up my SOA soon, please bear with me if I am being niaeve on some of my figures.

L x

tiggerbodhi

Reference the Company car, in purely my opinion for peace of mind would go for the company car as there will be no "surprises" with it, ie maintenance cost etc, it will be "paid" for by your tax code and the IPA if there is one is based on your net earnings.

If he is paid a lump sum every month as a car allowance for a car (I was and then claimed fuel per mile back on top) the problem could be is that the OR see's this as additional income rather than specifically for the car (HMRC do not make any distinction) and therefore say you are allowed a car up to £1000 only, the rest has to go towards an IPA.

whatdowedonext

Thank you tiggerbodhi

I have had some more news

Typically our luck seems to be running out! My DOH's employer is stopping all company cars! Car allowance only from now on.

If he wanted to use his car allowance to finance a newer more reliable car what are his options if any? Or does he run this one into the ground. His boss very kindly seems to be turning a blind eye to the age of his vehicle currently

whatdowedonext

Has anyone ever heard of this? My husbands gets a £440 car allowance before tax would he be allowed to use this to lease a car where he doesn't own it but his running costs are all included. As I have mentioned before his car is old and starting to have costly parts replaced. Our thoughts are that the personal car hire will mean a flat known payment and no scary surprises. He doesn't need anything flash or brand new just a known figure each month which covers everything.

wdwdn

foolishboy

I was in a similar situation and I made sure that the car allowance was used for a leased car. I happened to get mine via Wessex Vehicle solutions.

My OR never questioned the value of the car, it wasn't an asset as it was leased and the agreement was allowed to continue during BR.