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Company car benefit

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13

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  • Jack_Cork
    Jack_Cork Posts: 231 Forumite
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    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
  • facade
    facade Posts: 7,091 Forumite
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    I wish I earned enough to actually pay £600 a month tax in the first place! :smiley:
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

    (except air quality and Medical Science ;))
  • DoaM
    DoaM Posts: 11,863 Forumite
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    edited 9 June 2020 at 8:23AM
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    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
    Jack_Cork Posts: 231 Forumite
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    It should be accounted for by your tax code. The BIK get taken off your tax free allowance, hence you pay more tax
  • facade
    facade Posts: 7,091 Forumite
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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!
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

    (except air quality and Medical Science ;))
  • Jack_Cork
    Jack_Cork Posts: 231 Forumite
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    Yes thats right, its a K code. 
  • Jack_Cork
    Jack_Cork Posts: 231 Forumite
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    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
    Rich6859 Posts: 25 Forumite
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    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
    Grumpy_chap Posts: 15,165 Forumite
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    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
    DoaM Posts: 11,863 Forumite
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    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.
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