Giving Up the company car?

Woody37`

Hi,

Had a company car for 18 years. Now deciding on whether I should give it up. I currently do not have an option of a cash alternative in my contract of employment. However my boss is keen for me to not have the company car. So my question is how is my additional salary calculated?

My Passat cost £24k. They never lease it is always purchased outright. They provide me fuel at about £3k per year and the NIC say is £1100.

I get a new car every 3 years or 60,000 miles. My private mileage is high at about 15k with 5k business miles.

Over 3 years the car costs the company £24k car +£9k fuel + £3300 NIC = round that to £36k.

So do i simply divide that cost into 3 and arrive at £12k?

Any help appreciated.

Drew

CvPiper

I wouldn!!!8217;t reckon that!!!8217;d be what they would do.

The car has residual value, say 50% after 3 years, and they would have reclaimed all vat. I know my company car has a cash equivalent, but it!!!8217;s a little clearer cut at as I pay my own fuel (no. Business mileage).

Mine is based on about 3k back if I surrender the car.

On an average car, I would ave thought you!!!8217;d be a lot better off keeping the company one, taking into account running costs, tax, insurance and the purchase or lease of a car. Never mind the fact that whatever monetary equivalent you get back you!!!8217;d be taxed on at upto 45% anyway.

flashg67

Is it more realistic to look at the value to you, eg, how much it would cost you to lease, maintain & fuel the same car over 3 years, then divide by 3?
The company still have their asset after 3 years which still has a value, plus any VAT/tax deductions they can get

AdrianC

The car has a %age value associated with it, which is based on the CO2. You are taxed on that %age of list price. For full fuel benefit, you're charged at that %age of c.£24k.


Put the car's precise details into this calculator to see exactly what it's costing you. I bet it's more than you think... https://www.parkers.co.uk/company-car-tax-calculator/