Company Car Buy Out

k3lvc

sheramber wrote: »

You will gain the tax on the £9375 that you are paying now.

And this is the crux to the calculation - if the OP misses this bit and goes into bat with the company re a salary increase they'll be laughed out of court.

I have a good car allowance but taking the tax cut into consideration has allowed me to run both family cars off a single car allowance + tax saving

facade

I fear I am a simpleton, but if the cash equivalent is £9375, then £9375 is what they should pay as salary, surely, then the tax will be the same, and the difference will be the "extra" to bring you back to where you are???

doningtonphil

facade wrote: »

I fear I am a simpleton, but if the cash equivalent is £9375, then £9375 is what they should pay as salary, surely, then the tax will be the same, and the difference will be the "extra" to bring you back to where you are???

Its not as simple as that. The cash equivalent that HMRC comes up with is based on a certain percentage of the list price of a new car. I was looking at a car with a cash equivalent of £12000.

I would have been taxed on the £12000 even thought there is no way it would cost £1000 per month to lease and maintain the car. Also, I wouldn't need a £12000 salary increase for me to go out and personal lease and run the same vehicle

doningtonphil

neil_deluxe65 wrote: »

Hi All,

Thanks for the responses

I probably won't replace like for like! - but looking at what is a fair deal for having the option taken away, and present back what that actually means in terms of "if I was to Private lease the exact same vehicle.....and insure / tax etc"or even based on what it costs the company to lease, basically I do not want to lose out and be treated fairly.

Yes, like for like is a good starting point. But as the tax is based on the list price of a new car there is no advantage to your company providing you a 2nd hand car.

Once the cash is in your back pocket though, the world is your oyster...

facade

doningtonphil wrote: »

Its not as simple as that. The cash equivalent that HMRC comes up with is based on a certain percentage of the list price of a new car. I was looking at a car with a cash equivalent of £12000.

I would have been taxed on the £12000 even thought there is no way it would cost £1000 per month to lease and maintain the car. Also, I wouldn't need a £12000 salary increase for me to go out and personal lease and run the same vehicle

So say you are a 40% tax payer, you mean they make you pay £4800 tax for having the car (£400 pcm), that you could likely lease yourself for less than £400 a month anyway- why would you want one?


(Told you I was a simpleton )