Looking to run own car for work

redtailed78

I'm going to be handing my company car back at the end of the month and looking to change to an allowance instead as the car choice and BIK are very poor. (I know it's probably been asked a million times before )

Allowance £3600 Taxed at 20% but saving £60 per month BIK so £300 per month after tax

Mileage 30000 (20000 business + 10000 private)

I can claim 18p per mile as well as the goverment rates for tax relief.

The car i'm looking at will be £17500 over 4 years with roughly 50mpg (Seat Leon FR 184)

Rough value after 4 years would be £3-4k

The bit I'm struggling with is calculating how much I will get back from business mileage claims as rough costs for fuel on the above car is 12p per mile. I've always used a fuel card so never claimed mileage back before. I want to make sure there will be enough to cover most of the servicing/tyres ect.

I am fine to put money into running the car but dont want to get stung if my calculations are way off.

What do you all recommend?

k3lvc

Before you make comparisons a couple more questions

Will the car allowance tip you into 40% bracket ?

Did you have a fuel card (taxed) previously ?

How much per mile does company pay and can it be varied ?

On top of that consider

a) Additional insurance costs if business cover needed
b) Breakdown cover/maintainance/additional warranty after 60k miles
c) Cost of keeping you mobile if something goes wrong (presumably with company car you just pick up the phone and they sort a replacement to keep you on the road)

That said I've done it for 15yrs now and other than a couple of wrong decisions which have cost me financially I'm still better off and now run a Jag XF on Astra money

redtailed78

I will stay in the 20% bracket with the allowance on top.

I have a fuel card at the moment - I pay for any private fuel used every month so I dont get taxed on the fuel card.

The company will give me 18p per mile, This is currently under review but they dont think it's changing.

My insurance quote is £380 and this includes business use

I will need to look into an additional warranty outwith the 3 year/60'000 and worst case I have my other halfs car which can be used should I need to at any point.

I could probably make the choice easier by picking a lower spec car but the reason I want to come out is so I can choose my own car

Good job getting into an XF :T

Thanks

engineer_amy

Consider all those points that K3lvc has raised, but purely on the mileage claim calculations:


Based on 20k business miles at 18p per mile, your employer will reimburse you £3600 over the year.


If you were paid HRMC approved rates your would get


10000 miles at 45p = £4500
10000 miles at 25p = £2500
total £7000


so you can claim tax relief HMRC on the difference £3400. Assuming 20% tax, this is £680. I am honestly not sure whether you can receive this as a rebate or whether they adjust the following years tax code.


So for the year you would have £4280 (3600 + 680) and your cost of fuel for those 20000 business miles at 12p comes to £2400, leaving £1880 to cover wear and tear, servicing, insurance, breakdown etc

marlot

I managed to run a Toyota Landcruiser for much the same as it had cost me to have a company Mondeo. BUT ... I didn't do nearly as many business miles as you, and I got a better mileage allowance.

I created a spreadsheet and used that to evaluate the options. The hardest things to estimate are repair bills and depreciation.

neil.woos

marlot wrote: »

I managed to run a Toyota Landcruiser for much the same as it had cost me to have a company Mondeo. BUT ... I didn't do nearly as many business miles as you, and I got a better mileage allowance.

I created a spreadsheet and used that to evaluate the options. The hardest things to estimate are repair bills and depreciation.

Your Landcruiser must have drank more fuel than a cruise liner

dannyrst

neil.woos wrote: »

Your Landcruiser must have drank more fuel than a cruise liner

Is it more efficient than a 1.6 Astra though?

redtailed78

Ok so it's looking more doable and wont cost me that much to take the allowance :j

Rough numbers...

Car Allowance

---

£ 300.00
Income tax deduction

---

£ 60.00
BIK saved

---

£ 58.77
Total

---

£ 298.77

CAR PURCHASE PRICE

---

£ 375.00
Road Tax

---

£ 2.50
CAR INSURANCE

---

---

£ 50.00
FUEL (20000 business) --- ===£ 151.50
Claimed 18p per mile

---

-£ 300.00
Service (20'000 miles)

---

---£ 15.00
Tyres

---

£ 33.33

Total costs ----(Outwith Fuel) £ 475.83
(After allowance)

---

£ 177.06
(Fuel expenses to be deducted) £ 148.50

Cost I need to pay

---

£ 28.56

So as long as I keep the warranty extended for the last year it's possibly doable...

I'll be putting away £200 each month for unseen costs and deposit for the replacement in a few years as that's money I would have used funding my own car anyway.

Thanks for all the pointers

marlot

neil.woos wrote: »

Your Landcruiser must have drank more fuel than a cruise liner

At least it exists!

neil.woos

marlot wrote: »

At least it exists!

A silly choice to do mileage in. What was your mpg? low 20's?

oscarward

engineer_amy wrote: »

.


I am honestly not sure whether you can receive this as a rebate or whether they adjust the following years tax code.

The pain side of getting a refund is you often have to do self assessment, but you get the choice of lump sum or tax code adjust if the amount is less than a threshold. I usually ask for a tax code change.


After a few years they preload your tax code with the previous years rebate, well they do in my case.


i.e. my tax code is 1075L.


I run a jag XF as a company car, impresses the clients and fellow workers. I even enjoy driving to work now.