Company Car

chokolat2

Hi. Can anyone help me please

Last week I received a company car. I can also use this car for my private use, all fuel paid for.
I know that this is going to affect my tax..
but Im struggling to understand the car benefit tax and car fuel tax.

How will I work this out? I am not paying any contributions towards the car, the company pays for everything.
I have seen a few calculators online, but still not 100% understanding it.

The value is 10,500k with co2 emission of 104. It is a diesel car. and I am a 20% tax payer.

Can someone help?

withabix

This HMRC calculator will answer your question:

http://cccfcalculator.hmrc.gov.uk/CCF0.aspx

withabix

Unless you use more than £600+ of private fuel per year, you should pay your employer back for private mileage, otherwise the tax you pay for the fuel will be more than the cost of the fuel you use.

chokolat2

This is what i dont understand.
I dont pay a penny, my company pays for all fuel (business and private).

Yes i have seen the calculator, and it has given me 2 figures, one for company car tax and the other for company car fuel tax. Does the first one apply to me?

notanewuser

chokolat2 wrote: »

This is what i dont understand.
I dont pay a penny, my company pays for all fuel (business and private).

Yes i have seen the calculator, and it has given me 2 figures, one for company car tax and the other for company car fuel tax. Does the first one apply to me?

Of course it does! You have a company car!!

withabix

You add the two figures together and that's your tax.

ie about £1000 per year.

saintjammyswine

You pay 2 lots of tax.

1 for having access to the car.
2 for having fuel available for private mileage.

It is in my experience (apart from unusual circumstances) financially better to record ALL personal mileage, work out the cost based on the following each month.

Private Mileage in the month x total cost of fuel in month
total mileage in the month

This will mean you pay for your own fuel out of the following month's wages but this will usually work out far less than the tax you would pay if you did not do this.

Any

chokolat2 wrote: »

This is what i dont understand.
I dont pay a penny, my company pays for all fuel (business and private).

Yes i have seen the calculator, and it has given me 2 figures, one for company car tax and the other for company car fuel tax. Does the first one apply to me?

That is because they are two different elements of the tax.
So your tax bill is both of them.
See if your employer lets you repay any private fuel... They don't have to. But most do.
There will be either calculation like Saintjammyswine involved, or they might just use the recommended HMRC rates for ease.
But fuel benefit might be worth it. How much private mileage do you do? Also, if you are going to office and from office, unless your home is your registered office this mileage is also private mileage... commuting to your office is not a business mileage so don't forget to count that.

And - CALL TAX OFFICE TO TELL THEM ABOUT THE COMPANY CAR ASAP and they will change your tax code and start deducting the tax monthly. Otherwise next year you are going to get slapped with the tax all at once.

saintjammyswine

Any wrote: »

That is because they are two different elements of the tax.
So your tax bill is both of them.
See if your employer lets you repay any private fuel... They don't have to. But most do.
There will be either calculation like Saintjammyswine involved, or they might just use the recommended HMRC rates for ease.
But fuel benefit might be worth it. How much private mileage do you do? Also, if you are going to office and from office, unless your home is your registered office this mileage is also private mileage... commuting to your office is not a business mileage so don't forget to count that.

And - CALL TAX OFFICE TO TELL THEM ABOUT THE COMPANY CAR ASAP and they will change your tax code and start deducting the tax monthly. Otherwise next year you are going to get slapped with the tax all at once.

I used to work in field sales and was home based. Because my place of work in the contract was my home address, any mileage related to work, including commuting to the head office was recorded as work mileage. The reason I use that calculation is that it rewards you for spending less on fuel through careful, fuel efficient driving as you pay a % of the total fuel bill. If this is lower, you pay less.

Any

saintjammyswine wrote: »

I used to work in field sales and was home based. Because my place of work in the contract was my home address, any mileage related to work, including commuting to the head office was recorded as work mileage. The reason I use that calculation is that it rewards you for spending less on fuel through careful, fuel efficient driving as you pay a % of the total fuel bill. If this is lower, you pay less.

That is exactly what I said? Unless your home is your registered office (for example in the contract - it has to be stated somewhere, you cannot just deem it is yourself and think tax office will accept the reasoning!!!)

You might use the calculation as much as you want, but the employer might not want to... It puts extra time on admin and checking receipts etc.
I am sure the employer will advise how to if they allow you to repay private mileage. I was only offering other ways of how it is done in the industry.

By the way I look after the fleet and deal with tax office in regards to cars, fuel and other benefits.

saintjammyswine

Any wrote: »

That is exactly what I said? Unless your home is your registered office (for example in the contract - it has to be stated somewhere, you cannot just deem it is yourself and think tax office will accept the reasoning!!!)

You might use the calculation as much as you want, but the employer might not want to... It puts extra time on admin and checking receipts etc.
I am sure the employer will advise how to if they allow you to repay private mileage. I was only offering other ways of how it is done in the industry.

By the way I look after the fleet and deal with tax office in regards to cars, fuel and other benefits.

Wasn't disagreeing with you, just giving my reasons for not using the HMRC calculation. Previous employer did use HMRC until I pointed out the potential savings through giving the drivers an incentive to drive more efficiently.