Company Car / Car Allowance Questions

owainjones

Thanks for the replies.....

To compare company car vs car allowance, on my HMRC letter do I check the "Less Car Benefit" line? If that is more than the car allowance am I loosing out?

With regards to car leasing, I do in excess 40,000 miles a year and can't find a decent car lease that will provide a car for that amount of mileage.

My only concern is once the vehicle is taken away, I'll effectively get £5,000 / year which will be £333.33 a month (after tax). This is no way enough to purchase a vehicle, never mind the ongoing maintenance/insurance/tax/breakdown etc.

AdrianC

£5k/yr before income tax, don't forget.

owainjones

AdrianC wrote: »

£5k/yr before income tax, don't forget.

So in my first post where I asked is it taxed, are we saying it's not?

So for £5000/year will it be

£333.33 cash a month or £416.67 cash a month?

Thanks

jimjames

dannyrst wrote: »

I thought it was an allowance, effectively a bonus. Can an employer specify which cars you can buy?

Yes they can. Maybe not a specific model but a car with 4 doors less than 5 years old for example. Fortunately ours isn't specified other than being 4 door.

owainjones wrote: »

So in my first post where I asked is it taxed, are we saying it's not?

Not sure why you now think it's not taxed. Every reply has stated clearly that it is taxed. We can't say what you get after tax as it will depend on your tax rate and circumstances. Not sure if it's subject to NI too?

It could be as low as £229 per month if you paid 45%

owainjones wrote: »

My only concern is once the vehicle is taken away, I'll effectively get £5,000 / year which will be £333.33 a month (after tax). This is no way enough to purchase a vehicle, never mind the ongoing maintenance/insurance/tax/breakdown etc.

It's exactly the same amount we get. I can confirm that it definitely is enough to purchase a vehicle and pay for running costs, in fact we are substantially in profit over the year. Maybe you need to look at different vehicles.

Car_54

dannyrst wrote: »

Interesting. I always assumed it was just a bonus, like for example I get a bonus for being on-call. Never needed/had a company car.

But your bonus also comes with conditions. Presumably you need to answer the phone when on call, and do some work if needed?

AdrianC

owainjones wrote: »

So in my first post where I asked is it taxed, are we saying it's not?

So for £5000/year will it be

£333.33 cash a month or £416.67 cash a month?

You are being paid £5,000 before tax. £416.67/mo. If your personal income tax rate means that works out to £333.33, then - yes - £333.33 after tax. Sorry, I just saw the £5k figure and didn't bother with the /12 bit.

basill

Don't forget you will no longer be paying tax on the benefit that is your existing company car.

loskie

you will also be claiming a mileage rate for business use I would expect. Currently HMRC is 45ppm for the first 10000 then 25ppm thereafter

jimjames

loskie wrote: »

you will also be claiming a mileage rate for business use I would expect. Currently HMRC is 45ppm for the first 10000 then 25ppm thereafter

Not normally. Ours is 10p if you're given a car allowance. You can claim difference on your tax return though

gingerdad

jimjames wrote: »

Not normally. Ours is 10p if you're given a car allowance. You can claim difference on your tax return though

Christ 10p barely covers the fuel costs.

Op : you need to check what mileage rate you can claim as with your mileage you should be quids in (you should be able to claim £11,000) towards running costs on 40,000 miles.