Company car benefit

Jack_Cork

A company car isnt a perk anymore, plus mine has sat on the drive for 3 months. For reference the list price is about £39k

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I wish I earned enough to actually pay £600 a month tax in the first place!

DoaM

Out of interest ... is the car tax accounted for by adjusting your tax code, or by showing it as a BIK on your pay slip? (Mine is calculated using the latter method. BIK = £570 ish per month so I pay 40% tax on that, so £230 ish).

Jack_Cork

It should be accounted for by your tax code. The BIK get taken off your tax free allowance, hence you pay more tax

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So with an £18k BIK, you get a negative tax code, which means that not only is every penny you earn taxed (except pension contribution) but you owe the tax on the negative number even if you don't earn anything!

Jack_Cork

Yes thats right, its a K code. 

Jack_Cork

The BIK on my car is £11k, so I only have tax free earnings of about £1k-ish. I get taxed on the £11k, so costs me £4,400 per year. As per the OP if you had a car allowance wouldn't have to pay that tax, plus you get the allowance, which is taxed, plus I think as its your own car you can claim a higher amount per mile for the fuel. All in all an allowance works out better

Rich6859

Thanks a lot folks for the info. Will def look at just claiming for business miles and also thanks again for the info on car allowance 

Grumpy_chap

As others have demonstrated the car allowance offered looks good.
Regarding the fuel, though, you need to look again.  Others have treated the fuel card as still applying in the same way as it does for a company car.  That is not the case when you have your own car plus a fuel card - which really is the best of both worlds.
The fuel card for your own car will mean you pay BIK on the actual amount of money spent at the fuel pump.  You can then claim back as a tax allowance for business mileage at 45p per mile for the first 10k miles then 25p per mile after that.

DoaM

Jack_Cork said:

plus I think as its your own car you can claim a higher amount per mile for the fuel

Unfortunately that's not correct ... it's not truly a private vehicle as it is partly funded by the company in the form of an allowance. Therefore your business mileage can only be claimed at the lower HMRC rates.