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Car Allowance and Tax
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DanielStallion
Posts: 9 Forumite
Hello Forum,
Just got landed with £6k tax bill - being demanded immediately.
HMRC claim my employer gave the wrong information about taxable benefits.
I get a £490 p/m 'car allowance'. The company have a car scheme with and external vendor through which I lease a car. The car list price is £50,000 (roughly, including 'add-ons') CO2 142. I get about £720 deducted from my pay p/m.
According to HMRC that is a taxable benefit of about £13,500 - does this seem correct? The last car I had on the same scheme was half the value but taxable benefit was £3,000.
If I'm only getting £6,000 allowance how is it a £13,500 benefit? I know it's more than the £6000 allowance, but more than double? I've tried online calculators, but they don't seem to allow me to input all the details (allowance, pay deduction etc.)
Ta for any insight....
Just got landed with £6k tax bill - being demanded immediately.
HMRC claim my employer gave the wrong information about taxable benefits.
I get a £490 p/m 'car allowance'. The company have a car scheme with and external vendor through which I lease a car. The car list price is £50,000 (roughly, including 'add-ons') CO2 142. I get about £720 deducted from my pay p/m.
According to HMRC that is a taxable benefit of about £13,500 - does this seem correct? The last car I had on the same scheme was half the value but taxable benefit was £3,000.
If I'm only getting £6,000 allowance how is it a £13,500 benefit? I know it's more than the £6000 allowance, but more than double? I've tried online calculators, but they don't seem to allow me to input all the details (allowance, pay deduction etc.)
Ta for any insight....
0
Comments
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£13,500 would be spot on for a petrol vehicle with list price £50k and 142 CO20
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I bet the previous car didnt have Co2 of 142 though. Bit late now but you need to establish the taxable benefit before selecting your car. I'm sure its lovely but do you really need a £50k car.0
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You can see for yourself if £13,500 is correct by using the calculator here - https://www.gov.uk/calculate-tax-on-company-cars0
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Thanks for the replies.
I guess what I don't really understand is that whilst the car was worth £50k - all I got from my employer was £6k 'allowance'. The car lease value was actually £800 p/m but I paid £300 of that. The online calculators don't seem to allow me to factor this in - according to the 'guidance' lease payment contributions are not 'personal use contribution' or 'capital contribution' - surely it makes a difference?
Like I say - probably my stupidity - but it makes no sense when I calculate the tax implications of a private lease ....0 -
Are you paying the £300 per month through salary sacrifice?0
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No - finally got HMRC to acknowledge they treated it as salary sacrifice, which it wasn't.... mystery solved ...
Thanks for the input0
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