HELP!! Company Car Tax

zygurat789

You don't say what your private mileage might be or how much your fuel benefit is as an individual amount. It's worth checking that the tax you are paying on this benefit, bearing in mind that the last £530 is at 40%, is less than the value of the fuel for you private mileage. There's no point in paying £1000 in tax for a benefit of £900

rs65

Iwillresolvemydebt wrote: »

ILW, I don't believe they are dodgy in any way... It is more likely that I got the wording wrong as I don't have the offer letter/contract to hand

I'm no expert but your employers submits a P11D every year showing your benefits so this will advise HMRC of the car. Its in your interest for the car to be advised to HMRC as soon as you get it or else you will just be delaying paying tax.

They maybe just said that you will be taxed on the car rather than being responsible for sorting the tax.

Edit, found a bit on their website

If you start to get taxable company benefits you should tell HMRC right away so that you don't get a large tax bill at the end of the year. Employers don't have to tell HMRC about any company benefits you get until the end of the tax year, unless it's a company car. HMRC will adjust your code number and start collecting all or some of the extra tax sooner. If you get a company car or change your company car, you only need to report the details to HMRC once you have the use of the car.

Skint_yet_Again

Iwillresolvemydebt wrote: »

I see, so I add my salary to the car and fuel benefit charges... This takes me to £41980
Thanks,

Paul

Paul is this your taxable salary (ie salary minus any non taxable pension contributions) plus taxable benefit for car and fuel from June to 5/4/14 ?

Remember if you have any other taxable income from 6/4/13 this will need to be added also (previous job? etc )

1. You add together your total taxable income and benefits

2. You deduct your personal tax allowance (full allowance is 9440 but HMRC should have advised you if your allowance is reduced for any reason eg underpayment from earlier years being collected in your code in 13/14)

3. You then pay tax on the remainder
at 20% on £32,010 then
from £32,011- £150,000 at 40%
and over £150,000 at 45%

(if you have any UK dividends to add to taxable income these are taxed at slightly different rates see here http://www.hmrc.gov.uk/rates/it.htm )

Remember that your taxable income will change when you change your car and you will need to recalculate using car 1 and car 2 for the dates the cars are actually available

Good luck in your new job

Iwillresolvemydebt

zygurat789 wrote: »

You don't say what your private mileage might be or how much your fuel benefit is as an individual amount. It's worth checking that the tax you are paying on this benefit, bearing in mind that the last £530 is at 40%, is less than the value of the fuel for you private mileage. There's no point in paying £1000 in tax for a benefit of £900

As I understand it, the fuel benefit is a fixed amount? I don't plan to use the car for any private mileage other than the commute to and from work (circa 75 mile round trip daily). I have been asked to limit private usage other than this - do you know why this might be?

SYA, that would be my taxable amount assuming I was employed for the whole tax year with my new employer. However, as I am currently on roughly half of my new salary, I guess my figures will be less. Also, I am just using very rough estimates currently to get an understanding of expected deductions and as such, have not yet factored in pension contributions etc.

Thanks Paul

Iwillresolvemydebt

Skint_yet_Again wrote: »

Remember that your taxable income will change when you change your car and you will need to recalculate using car 1 and car 2 for the dates the cars are actually available

Good luck in your new job

Yes, got that bit. Will have a bit of a head start when it comes to changing my car (new one) and have already worked out roughly, that my taxable benefit will be half of what it will be on the first car

Many thanks, it will be a challenge!

zygurat789

Iwillresolvemydebt wrote: »

As I understand it, the fuel benefit is a fixed amount? I don't plan to use the car for any private mileage other than the commute to and from work (circa 75 mile round trip daily). I have been asked to limit private usage other than this - do you know why this might be?

SYA, that would be my taxable amount assuming I was employed for the whole tax year with my new employer. However, as I am currently on roughly half of my new salary, I guess my figures will be less. Also, I am just using very rough estimates currently to get an understanding of expected deductions and as such, have not yet factored in pension contributions etc.

Thanks Paul

Fuel benefit is the product of the CO2 % and £21,100. I have no idea employer should ask this of you, ask them.
You could be better off paying for your private fuel. To ascertain this you would need to post car CO2 g/km and mpg.

MEM62

Iwillresolvemydebt wrote: »

I don't plan to use the car for any private mileage other than the commute to and from work (circa 75 mile round trip daily). I have been asked to limit private usage other than this - do you know why this might be?

The level of taxation on company cars means that, these days, they are not the great benefit they once were. Particularly if you are a 40% tax payer and do not have a low emissions vehicle. As you employer is requesting that you do not use the vehicle for anything other than travelling to work I would suggest that you seriously look at whether it is worth you having it. You might find that having a company car is costing you more than running your own - particularly if you need too also fund a second vehicle for your other private use outside travelling to and from work.

As a final note, the fact that your employer wants to restrict the use in this way would be of great concern to me. Why would they do this? You either have a company car as a part of your package or not. To have one and limit usage in this way is unusual in my experience and makes no sense.