Help a worried mum - company car and child benefit

mrsdanreid

Hi everyone

Not sure I have posted on the correct thread 🙈... I could really really do with some help as I am extremely worried and anxious..

In a nutshell, I am studying to become a mental health nurse (access course at college not uni as yet)and my husband is employed. We have three children.

My hubbys salary is 31k.. However he has to have a company car with his employment.. It was either a BMW or Mercedes for his company so he went with the bmw.

A friend told me that we will now most probably not end up with child benefit as we are over 50k threshold? I'm so confused. We do not receive any tax credits and I'm very worried as we will be living on approx 1800 a month which after all our bills and rent leaves us with about 100 a month for five of us. The child benefit helps us out so much.

Can anyone explain to me in simple terms the impact of this company car to tax credits and child benefit. Do they add on the whole value of the car I.e 33k list price to my hubbys salary of 31k? Im worried that im going to have to come off my nursing course and just go into employment instead just to make ends meet.

Any help would be great fully appreciated thank you Emma x

antrobus

mrsdanreid wrote: »

...
Can anyone explain to me in simple terms the impact of this company car to tax credits and child benefit. Do they add on the whole value of the car I.e 33k list price to my hubbys salary of 31k? Im worried that im going to have to come off my nursing course and just go into employment instead just to make ends meet....

Husband will be taxed on the benefit in kind of receiving a company car. How much will depend on list price of car and the CO2 emissions of the vehicle.

http://www.fleetnews.co.uk/fleet-faq/what-are-the-current-bik-bands-/3/

macca1974

I wouldn't worry too much about this as I suspect that your friend is probably wrong. The whole value of the car isn't added to your husbands income, it is the P11D value that is added and this will depend on the type of car that it is. If you google "company car tax calculator" then lots of them appear and you can put in the details of the car and it will show you the P11D value. But, it isn't likely to be much more than 20% of the value of the car. So if it was 20%, then the amount that is notionally added to your husbands income would be £33K x 20% = £6,600. This then added to the £31K salary takes him to £37,600. One of you needs to be earning over £50K per annum to start losing your child benefit, so unless he has a load of other taxable benefits, you should be okay. But you'd need to check the specific car, and also see if he has a fuel card as well as that would add to the P11D value as well.

peasepud

Id find it highly unlikely that the Benefit in Kind on a £33k car would amount to £17k per year.

They definitely don't take the full amount of the car into account each year as company cars aren't changed annually for starters. HMRC have loads on info on Benefits in Kind on their site and a handy calculator

http://cccfcalculator.hmrc.gov.uk/CCF0.aspx

[Deleted User]

mrsdanreid wrote: »

A friend told me that we will now most probably not end up with child benefit as we are over 50k threshold?

1) Ignore your friend - he/she is just wrong!
2) Find out the P11D value of your husband's benefits.
3) Ensure that this value is reflected in your husband's tax code ( you do not want a sizeable tax underpayment)
3) If the value of the benefits is less than £19000 the child benefit is not restricted.

It also appears that you are not earning at the moment? If the value of the benefits is less than £12500 or so (surely it is?) you can elect to transfer 1100 of your personal allowance to your husband.

https://www.gov.uk/marriage-allowance/how-it-works

elverson

Remember that his work aren't giving him the car, they're 'lending' it to him. However as he's allowed to use it for private use outside work this is a benefit-in-kind and so there is extra tax to pay.

Pennywise

Whilst you almost certainly won't lose the child benefits, have you factored in the increased tax your OH will be paying on his car/fuel benefits? His take home pay will fall once his tax code is adjusted to take account of the taxable benefits.

mrsdanreid

Thank you everyone for your swift replies. ��... I'm sure on his p11d it was the list price of the car which was around the 33k mark. I'm going to check out the marriage allowance thank you guys so much!yoi have all put my mind slightly at ease x

d70cw6

no you wont lose any child benefit.

i cant imagine the company car BIK would be > £20k per annum....