company car/Car allowance

Hudson1984

Hi all, just after some advice.

My company has a company car policy and also car allowance. My query relates to expensing fuel.

my company gives HMRC rates for company cars for private cars and also company cars i.e 14ppm in both cases for a 1.7ltr diesel for example. I thought a car allowance was basically a private car so surely I should recieve the private car rate for fuel i.e 45ppm for the same engine rather than the company car rate? or am I wrong here?

danieln_2

Yes this is what I have found, I get 12p or so with my company car but if I took the car allowance it would be 45p per mile.

Hudson1984

that was certainly the case in other companies but here it's a blanket amount.

I have a company car but had thought about changing if the conditions of fuel were better - especially with the revised amounts this month

Caz3121

Where I work there are 3 options (ficticious numbers)

1) Receive no allowance or car. If need to use car for business miles, receive 45p per mile
2) Receive car and 14p per mile for business miles
3) Receive car allowance of £350 per month and 14p for business miles

In my view this is proabably ok as the higher rate differentiates from the people that receive something whether car or money

However if you fall into number 3 and are being paid less than the HMRC rate of 45p for the first 10,000 miles then you can claim tax relief on the delta
eg 10,000 miles
HMRC rate would be £4,500
amount paid by employer £1,400
delta £3,100

tax refunded for 20% tax payer = £620. for 40% taxpayer £1,240

as you get paid an allowance the company can choose to pay whatever they wish...if they pay more than the HMRC rate then this would be a taxable benefit, if they pay less you can reclaim the tax on the difference

you will find threads on reclaiming in the Cutting Tax board