Company car tax

Fatpigeon

so i've not long found out that I am on a K264 tax code, being taxed over £110 per week!!!
I guessed this is because I didnt pay enough tax last year because half way through the tax year I received a promotion and started getting use of a company car.

I didn't realise that I would be taxed on this, maybe it's something I should have known but no one actually told me, not ever my employer! now before I got the letter about my tax code changing I received another one I think a P11d?? for BIK?? stating that my company car is a Peugeot 308, now I work for a car rental company, and our company cars are not guaranteed makes or models, its what ever we are able to take on the day, up to a certain class, so sometimes it could be a 308 or similar, sometimes its a Toyota aygo, other times it could be a van!

My questions are, how can I be correctly taxed on a company car, if it changes from day to day? I think the longest I kept the same car was for about 4 weeks during a quiet period in car rental.
is the company up to something? is it being done correctly? and how come i'm being taxed such an astronomical amount each week for this?

Martin

Dazed_and_confused

You really need to say how the K264 tax code has been made up.

It might be just down to the company car. Or it it could include tax you owe. Or it could be a million other things.

Your employer produces the P11D so you need to speak to them to understand how and why the form has been completed in that way.

Car dealerships, where cars made available to employees can change regularly have their own special rules, maybe car rental companies have similar arrangements?

Dazed_and_confused

It looks like car rental companies can also use the special rules.

Probably worth asking your employer if this is what they are doing.

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim23815

Fatpigeon

They Probably are doing this, trouble is when I was earning around £440 a week and it goes down to sometimes under £300 with tax and NI it has a detrimental effect on my living costs, especially when a member of my staff who is on minimum wage comes out with more a week than I do!!

00ec25

Fatpigeon wrote: »

They Probably are doing this, trouble is when I was earning around £440 a week and it goes down to sometimes under £300 with tax and NI it has a detrimental effect on my living costs, especially when a member of my staff who is on minimum wage comes out with more a week than I do!!

then learn to live within your means, just like your minimum wage colleague is doing, difference is they don't have a company car

Caz3121

do you have the option to not use a company car and provide your own transport?
If you can purchase, insure, service, mot, tyres etc your own car for under £140 per week then it may be more beneficial (I guess the people that don't have a company car need to do that from their income)

Fatpigeon

00ec25 wrote: »

then learn to live within your means, just like your minimum wage colleague is doing, difference is they don't have a company car

Thanks for the helpful advice, if I wasn't coming out with less than my minimum wage colleague, for doing the exact same amount of hours, then I don't think there would be an issue, My point is that, for almost a year I wasn't being taxed on a company car, I didn't question this because no one told me I was meant to be, then when the new tax year started i'm all of a sudden being taxed on more than my annual earnings, i'm on £25k a year, i'm being taxed on £28k.

Fatpigeon

Caz3121 wrote: »

do you have the option to not use a company car and provide your own transport?
If you can purchase, insure, service, mot, tyres etc your own car for under £140 per week then it may be more beneficial (I guess the people that don't have a company car need to do that from their income)

I am currently in the process of getting my car back on the road, I have a number of repairs to do and then get it MOT'd, taxed and Insured again, then i'll be using that instead of my company car.

I don't think I would be in such an angry state, if I had been taxed on the company car from day one of having it, trouble is, is it really worth it to use my own car, when i'm going to be taxed on last years use of a car for the remainder of this year?

Dazed_and_confused

Even if you give the company car back you will the same tax to pay from last (tax) year.

All that would change is your tax code would be adjusted to reflect the fact that you have only had the car available for part of the current tax year.

The closer you get to April 2020 the smaller the change will be. You have already had the car for nearly 5 months of the current tax year.

Once you get to 6 April 2020 your tax code wouldn't have the tax owed for 2018:19 in it if that is all being paid off during this tax year.

Fatpigeon

Dazed_and_confused wrote: »

Even if you give the company car back you will the same tax to pay from last (tax) year.

All that would change is your tax code would be adjusted to reflect the fact that you have only had the car available for part of the current tax year.

The closer you get to April 2020 the smaller the change will be. You have already had the car for nearly 5 months of the current tax year.

Once you get to 6 April 2020 your tax code wouldn't have the tax owed for 2018:19 in it if that is all being paid off during this tax year.

This is what I was thinking, but I guess if I give up the car now, then I won't be taxed as much next year..... it's all such a nightmare I wish I was told when I was promoted and given the car that I would be taxed on it. I've never had a company car so didn't realise, especially because of the fact that I am insured to drive all of our cars anyway as part of my job, it just didn't dawn on me that i'd get taxed on one.