We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Company Car or Allowance?
My Organisation is intending to close its company car lease scheme and proposes to give all employees a car user allowance plus a business mileage allowance.
At present a company car is leased to employees for 3 years. A Vauxhall Astra Elite 1.7 CDTi with an annual tax bill to a 22% taxpayer of £696 per annum would be a vehicle within the organisation’s budget. Business fuel use is reimbursed to the employee at 12p per mile. I typically cover 16,000 business miles per year.
I am offered in lieu of the lease car a User Allowance of £1,278 per annum (subject to tax and NI which leave me with £895 per annum) plus business mileage is reimbursed at 40p per mile up to 10,000 miles then 25p per mile after 10,000 miles each tax year (non taxable). I will get in my pocket £6,395 per annum to run my car
Would I, from a financial point of view, be any worse off if I bought the same Vauxhall Astra vehicle from new, ran it for 3 years (covering 20,000 per year, 16,000 business, 4,000 private) and renewed it every three years, than if I retained a company car?
If I would be worse off how much should I ask for in lieu of the company car? Does anyone have a spreadsheet that allows you to compare a company car benefit against providing your own vehicle where you can vary business and private mileages as a cost comparison?
At present a company car is leased to employees for 3 years. A Vauxhall Astra Elite 1.7 CDTi with an annual tax bill to a 22% taxpayer of £696 per annum would be a vehicle within the organisation’s budget. Business fuel use is reimbursed to the employee at 12p per mile. I typically cover 16,000 business miles per year.
I am offered in lieu of the lease car a User Allowance of £1,278 per annum (subject to tax and NI which leave me with £895 per annum) plus business mileage is reimbursed at 40p per mile up to 10,000 miles then 25p per mile after 10,000 miles each tax year (non taxable). I will get in my pocket £6,395 per annum to run my car
Would I, from a financial point of view, be any worse off if I bought the same Vauxhall Astra vehicle from new, ran it for 3 years (covering 20,000 per year, 16,000 business, 4,000 private) and renewed it every three years, than if I retained a company car?
If I would be worse off how much should I ask for in lieu of the company car? Does anyone have a spreadsheet that allows you to compare a company car benefit against providing your own vehicle where you can vary business and private mileages as a cost comparison?
0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.6K Banking & Borrowing
- 254.2K Reduce Debt & Boost Income
- 455.1K Spending & Discounts
- 246.7K Work, Benefits & Business
- 603K Mortgages, Homes & Bills
- 178.1K Life & Family
- 260.7K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards