BIK tax (company car) versus mileage payments - have I got this right?

Basil_Hume

I'm now a year into a 3-year leased company car arrangement.

My employer pays 53p per mile for the first 3,500 miles, then 25p thereafter. It offers a lease car scheme where these sums are deducted from the lease cost, based on an assumed mileage. I then pay an additional amount for private use and for all fuel, as the mileage payment is considered to cover this.

The employer's payments are taxable as a "benefit in kind", which for me currently amounts to about £1,700 per annum on a 120g Co2/km car - and will escalate by about 10% per annum for the foreseeable future.

Although it's discouraged by my employer, I could have alternatively run my own car on similar mileage rates. These rates are taxed above 40ppm, but there's a tax rebate for under 40ppm (i.e. broadly nil impact for my mileage).

Given the above, it seems to me that I'd be far better off taking my own lease in future, as the tax burden is far lower?

Am I missing something?

Cornucopia

No, not missing anything.

There are ways to make company car ownership work - but taking a brand new car as BIK is not usually one of them.

WTFH

Would tend to agree. Just remember that if you are using your own car, it needs to have business insurance on it, if you are using it for anything other than going to and from a permanent place of employment.