how does a company car work?

chloo

hello all

please excuse me for being a little thick.

i interviewed today for a fantastic job with a company car i am pretty hopeful i will get the role.

anyway if you have a fully 'managed' company car (fuel tax insurance ect paid by the company) can you do things like a tescos shop in it or are you not covered for this?

basically at the moment i have a car on a pcp? deal. (may be wrong with the contract name? its not a hp) i would ideally like to get rid of it if i get this role as there is no room for two cars on the drive and would be silly to keep paying nearly 400£ per month to run a car that i wouldn't use often.

i am moving up north but am originally from down south so if i wanted to visit home could i do this in my company car? what happens with petrol ect?

a friend said you need to pay tax from your wages for a company car how would i work out what this is from my wages? is it literally the hp price each month or something else?

also could someone please give me a break down of handing back a car on the pcp deal? its a car i got new in jul 11 and put a 4k deposit on. july would be half way through my 4 year deal.

many thanks i really didnt know where else to look for advice!!

mgdavid

don't understand the term 'fully managed' - do you mean fully expensed? Whatever, you should google 'company car taxation' and do some reading and research.
http://www.hmrc.gov.uk/cars/ is a good one to start with.
The tax will be all done by PAYE and shown on your payslips. Also you should ask the employer for a copy of their company car policy as that will explain some of the rules and conditions, for example if other family members can drive the car, if it can be taken abroad, conditions about how it is looked after etc etc.

forgotmyname

You should have asked them about personal use of the car. Is there a 2nd interview? Make sure you ask.

My old firm seemed to add issue after issue with each years insurance. Insured on the company policy if you used your own car for whatever reason, Stopped only covered if they added the vehicle. Then stopped totally.

Only allowed to drive if they had an upto date copy of your licence. Only named drivers not any employee.

Commercial use and commuting only, No personal use.

Will you get use of the when your on holiday etc? Not have to leave it behind for someone else to use?

OddballJamie

My Dad had company cars for 30 years and always was able to use it for private miles as long as he noted down the mileage. He had a fuel card up until his last one which he opted to claim the pence per business mile rather than the fuel cost.

Anyone at his work over 21 could drive it and anyone in his close family also. Just had to let them know if he was taking it abroad.

I also have several friends with company cars and they all use them for private miles too. Only time I can think of that was business only was when someone I know had a van rather than a car.

InsideInsurance

A normal company car you can use for whatever you want, though there may be a mileage constraint.

As you arent the owner of the vehicle you do need to have explicit permission to take it overseas just as you would a lease vehicle etc.

The main challenge with company cars is the fact you must pay Benefit In Kind income tax on the vehicle which is based on a combination of its value and green credentials. If you want a sports car or gas guzzler then it can not work out very well for you, especially if you have fuel paid for you

If you arent allowed to use it for personal use the BIK disappears but you go back to needing another vehicle

bod1467

InsideInsurance wrote: »

If you arent allowed to use it for personal use the BIK disappears but you go back to needing another vehicle

That's the crux I believe - if you pay BIK tax for the vehicle then personal mileage is allowed (otherwise the vehicle is not a "benefit" really - it is a job-related tool).

I have a company car, and I pay BIK. I don't have a fuel card though, so any business miles I claim back through expenses.

At our place we need to provide a copy of the driving licence before receiving a vehicle. Additional drivers are allowed (e.g. partners etc.) but they also must provide a copy of the licence.

ILW

bod1467 wrote: »

That's the crux I believe - if you pay BIK tax for the vehicle then personal mileage is allowed (otherwise the vehicle is not a "benefit" really - it is a job-related tool).

I have a company car, and I pay BIK. I don't have a fuel card though, so any business miles I claim back through expenses.

At our place we need to provide a copy of the driving licence before receiving a vehicle. Additional drivers are allowed (e.g. partners etc.) but they also must provide a copy of the licence.

Tricky though, just driving it to the office once in a years kicks in the personal use bit.

Joe_Horner

"How does a company car work?"

You put fuel in at one end, the engine (usually at the other end) spins really fast and makes the wheels turn. That pushes the car along the road from where you are to where you want to be.


Sorry, completely unhelpful I know, but I just couldn't resist......

Lum

Joe_Horner wrote: »

"How does a company car work?"

You put fuel in at one end, the engine (usually at the other end) spins really fast and makes the wheels turn. That pushes the car along the road from where you are to where you want to be.

You also have to forget what the indicator stalks do and tear out the page in the highway code about stopping distances.


Serious answer though: It depends. It's mostly been answered above, some allow personal use, some don't. Commuting counts as personal use unless you are officially home based in which case a trip to the office counts as a business trip.

If you don't have personal use allowed, stuff like popping into the newsagents that you pass on the way home from a business trip is generally ok. It falls under the "don't take the P" rule e.g. don't take a 10 mile detour to the Tesco Extra and leave it in the car park for 3 hours before cramming the entire car with a months worth of frozen food.

In general a company car with personal use is a good thing. It allows for hassle-free motoring with fixed costs (except petrol) and no nasty surprises in the form of expensive faults that the warranty refuses to cover.

The biggest downside is that after two years, any no-claims bonus you may have on your personal car will expire, which can make switching back awkward. Some insurers will accept a letter from your boss saying you've had a company car for X years with no claims as an alternative.

chloo

thank you all for your replies!

i guess its a company policy thing i will have to ring up and ask.

lum thank you for the info on no claims this is something to remember and look into if i leave the position.

thank you

ntb1

Joe_Horner wrote: »

"How does a company car work?"

You put fuel in at one end, the engine (usually at the other end) spins really fast and makes the wheels turn. That pushes the car along the road from where you are to where you want to be.


Sorry, completely unhelpful I know, but I just couldn't resist......

ILW wrote: »

Tricky though, just driving it to the office once in a years kicks in the personal use bit.

Not true to be classed a commuting you need to be going to the same location serveral times a week. So a rep who visits the office once a week isn't classed as commuting for use purposes.