Company car tax

sunrise27_2

My husband has a company car which is crippling us in tax so he's thinking of changing to an allowance next year which will be paid to him in his wages and then used to get a personal lease on a car, would this allowance be taxed as though it is just a normal part of his wages ? Or is it still classed as a benefit in kind ?
Hope this makes sense ?

BoGoF

The allowance will be taxed as normal salary. Have you done the sums to see if better off taking the allowance?

What is the BIK figure for the car?

sunrise27_2

The car at the moment is worth about 9000 ish benefit in kind , he will be looking at a cheaper car !!!

sunrise27_2

I think the allowance monthly will be in the region of £300 I don't know exact figures at the moment

BoGoF

Once tax/nic has been deducted the £300 will be anywhere between £150 and £205 (very roughly). Will his employer also pay mileage allowance?

choccielover

Bear in mind you will have to insure and maintain this car also as these are the hidden costs people forget about.
It would also be a personal lease so he needs to pay vat on it (in case he is looking st the business deals that come up)he will also need to change the car every files years, my company always had a rule the car had to be less than 3 years.

Could he not have chosen a cheaper car from the list so he isn't paying as much in tax?? Is he due to change soon? Can he just drop out??

[Deleted User]

sunrise27 wrote: »

The car at the moment is worth about 9000 ish benefit in kind , he will be looking at a cheaper car !!!

If a basic rate taxpayer this results in £150 additional tax per month. This includes insurance, tax, repairs and the company bears the depreciation. Bear all of this in mind when comparing!

sunrise27_2

I think the company are pushing for him to go for a personal allowance , they will pay for the car tax and insurance ( I think )
He has been looking at personal leases not business
He is a higher rate tax payer but I think the car hasn't helped with that ( I think that has just pushed him into the higher tax bracket ) so by going for a personal allowance he should go back to being a basic tax payer.
And he will get a mileage allowance
I think at the moment he gets something like 14 p a mile that will go up to 43 p a mile

choccielover

Having the car won't have pushed him into being a higher rate payer...in fact taking an allowance will and accordingly more of his salary will be at 40%

BoGoF

What mileage will he be doing?

Dazed_and_confused

choccielover

Don't get your logic. If op's hubby was earning taxable salary of say £40k and has car benefit of £9k how is the car not pushing into being a higher rate payer