Company Car & Personal Contribution

Phil_007

Hi There,
I'm due to start a new job and will be getting a CC. I'll be making a 3% contribution. But I'm unsure how this impacts what tax I pay. Also I'll be getting a private fuel paid for, so I know that I'll have to pay tax on that.


All the calculators online don't seem to handle personal contributions


If I pay a contribution of £750pa does this get taken off the P11D value of the car so my BIK tax rate is less?


Can anybody explain it please?


Thanks
Phil

DoaM

I do a trade up to a better car. For this I have to pay £50 per month. This amount gets deducted from my total monthly BIK which means it only actually costs me £50 x marginal tax rate ... i.e. it reduces my tax liability a little.

Example 1 ... 20% tax rate ... £50 contribution ... tax impact = £10 ... net cost £40

Example 2 ... 40% tax rate ... £50 contribution ... tax impact = £20 ... net cost £30

Have you tried this calculator? It gives options for one-off and annual contributions.

http://comcar.co.uk/newcar/companycar/taxcalc/

Phil_007

DoaM wrote: »

I do a trade up to a better car. For this I have to pay £50 per month. This amount gets deducted from my total monthly BIK which means it only actually costs me £50 x marginal tax rate ... i.e. it reduces my tax liability a little.

Example 1 ... 20% tax rate ... £50 contribution ... tax impact = £10 ... net cost £40

Example 2 ... 40% tax rate ... £50 contribution ... tax impact = £20 ... net cost £30

Have you tried this calculator? It gives options for one-off and annual contributions.

Thanks Doam,


Using that website a standard V40 hatchback, with private fuel & 3% contribution comes out at £212 pm.


Does that sound about right?

DoaM

It depends on exact model specified and annual salary.

I tried with a Volvo V40 2.0 D2 Cross Country 120HP (£24,375 list), £731 annual contribution (3%), with private fuel and £40k salary. This gives £219.89 per month.

bigadaj

Phil_007 wrote: »

Thanks Doam,


Using that website a standard V40 hatchback, with private fuel & 3% contribution comes out at £212 pm.


Does that sound about right?

Is it worth you taking the private fuel, it's a fairly large flat rate which means you need to be doing quite a lot of personal mileage.

sheramber

HMRC calculator here

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

CharlesDukes

Following up on this, does anyone know if you can do a part salary Sacrifice?
For example, my employer puts £200.00 towards a car and I top that up to £337.00?
If so, what tax could I expect to pay on a BIK of £7,798.15 assuming a salary of circa £40k?
Thanks

DoaM

Probably best asking your company's HR/Payroll.

dempsey325

Hi Team

I"m after some advice
I am paying a trade up of £145.00 a month on my company car, the car should have been renewed last March 2020, I don't want the car, do I have to keep paying the trade up?
The reason it was not renewed is because my company want to change by contract, we were TUPED in when Carrillon went bust, I am still on my old contract.
Mick