Car allowance - tax & NI?

watcher27

Grumpy_chap said:

watcher27 said:

new boss doesn't like me having a company car at all, eveytime I pick one and comes to ordering she makes excuse after excuse as to why not at the moment. It's beyond comical now. For example I have a £350 budget + VAT, I found an EV I wanted, that was £348 a month, she now says its more than her car cost a month so no.

I have been exactly there.  In a previous job, I had a budget of £300 monthly, found an E-Class on a model run-out deal in budget and then told "no, better car than I have, BMW3 series, what I meant was for you to find a BMW1 series."  Wouldn't it just be easier if the management simply said "you can have this car or an allowance..."

I think you are correct to just go for the allowance and accept that the allowance is £350 per month.

Your calculation of £350 gross monthly allowance working out to £238 extra take home for basic rate tax payer seems to be about right.  Also, Jeremy did not pick that up as incorrect, and I am sure he would have done if the number was miles out.  So, yes £238 plus add on the BIK for the pick-up, which you say is £70 monthly, so that makes £308.

What is the current BIK for the fuel card with the pick-up, or is that included in the £70 per month?  That may enhance your take-home a bit more. 

If you go for an EV, the fuel card is effectively of zero value as I understand electricity provided free at work is not subject to BIK (at present).  

Grumpy_chap said:

watcher27 said:

new boss doesn't like me having a company car at all, eveytime I pick one and comes to ordering she makes excuse after excuse as to why not at the moment. It's beyond comical now. For example I have a £350 budget + VAT, I found an EV I wanted, that was £348 a month, she now says its more than her car cost a month so no.

I have been exactly there.  In a previous job, I had a budget of £300 monthly, found an E-Class on a model run-out deal in budget and then told "no, better car than I have, BMW3 series, what I meant was for you to find a BMW1 series."  Wouldn't it just be easier if the management simply said "you can have this car or an allowance..."

I think you are correct to just go for the allowance and accept that the allowance is £350 per month.

Your calculation of £350 gross monthly allowance working out to £238 extra take home for basic rate tax payer seems to be about right.  Also, Jeremy did not pick that up as incorrect, and I am sure he would have done if the number was miles out.  So, yes £238 plus add on the BIK for the pick-up, which you say is £70 monthly, so that makes £308.

What is the current BIK for the fuel card with the pick-up, or is that included in the £70 per month?  That may enhance your take-home a bit more. 

If you go for an EV, the fuel card is effectively of zero value as I understand electricity provided free at work is not subject to BIK (at present).  

Yep, she's just making the whole thing stressful, not realising the financial implications this all has on me. 
On the government gateway site, it tells me I get "Van Benefit" = £3490 and "Van fuel benefit" = £666. And my tax code is 822T because of this.
Multiply those by 20% is £832.20, which spread over the year is £69.26 a month.
Hence me not wanting to get a normal company car & fuel card lol, it would cost me a massive amount more a month. I dont actually know how much a non van fuel card works regarding tax, but I assume as all my 25K miles is personal, it would be alot?
I've found the perfect EV for me, that I can afford and easily manages my 70 mile a day round trip commute, so while not ideal for long trips down to cornwall etc (I live in kent), it is fine for 99% of the journeys I do!
The charging at work isnt anything to do with my company, the landlord who shares the building have just got electric Porches, and put the points in! I told them my plan for an EV, and they put in an extra one :-)

Grumpy_chap

Van benefit and van fuel benefit sounds correct for the pick-up.  The £3,490 is a figure I recognise.  I am not up to speed on van fuel benefit, but assume your figure of £666 is correct.  The £70 is then correct.

Non-van fuel card on a company car is often quite expensive.  Often equal to or higher than the car benefit.

Non-van fuel card BIK when you have your own car (car allowance) is very simply the value of fuel you purchase at the pump multiplied by your marginal tax rate.  It can then be reduced for any business mileage, but you say that is zero miles so not applicable for you.  This is quite attractive.

With an EV, your fuel card is worth zero as you will never put any fuel in (electricity does not count and is not currently a BIK).

Are you certain the landlord at the business park is not going to charge for electricity?  At a work place I was at they charged 32 pence per kWh.  If the electricity is free, then that is fantastic.
Given everything you have said, your overall strategy seems a good one.
Which EV have you picked?

watcher27

Grumpy_chap said:

Van benefit and van fuel benefit sounds correct for the pick-up.  The £3,490 is a figure I recognise.  I am not up to speed on van fuel benefit, but assume your figure of £666 is correct.  The £70 is then correct.

Non-van fuel card on a company car is often quite expensive.  Often equal to or higher than the car benefit.

Non-van fuel card BIK when you have your own car (car allowance) is very simply the value of fuel you purchase at the pump multiplied by your marginal tax rate.  It can then be reduced for any business mileage, but you say that is zero miles so not applicable for you.  This is quite attractive.

With an EV, your fuel card is worth zero as you will never put any fuel in (electricity does not count and is not currently a BIK).

Are you certain the landlord at the business park is not going to charge for electricity?  At a work place I was at they charged 32 pence per kWh.  If the electricity is free, then that is fantastic.
Given everything you have said, your overall strategy seems a good one.
Which EV have you picked?

You have been beyond helpful!
Just nice sounding my situation out with someone to make sure I'm not doing anything daft or financially suicidal lol
Its not a business park, just a building we share with the landlords. The company has been there 30 odd years and the electricity has always been included in the rent, and they were very up front (just two guys that run it) that we can use the chargers at no cost.

EV wise, I'd be going for the MG ZS EV.
Its super cheap, and incredible value for money, but all the reviews are very impressed with it! It gets around 140 miles real world, which is plenty for most the journeys I do.
If I was purchasing it for myself then maybe id worry about reliability down the line, but it would be on a 3 years lease, so thats irrelevant.
Comes with a free wall charger installation as well.

Also, as I'll be giving up my fuel card, I was thinking of asking the boss if she would consider increasing my monthly car allowance. I was allowed a petrol car of £350 a month and fuel, which would be around £200 in fuel a month, so me getting an EV will save her quite a bit.
Hopefully she will agree, no harm asking

Grumpy_chap

The MG ZS EV and the MG 5 are both fantastic cars - I am quite tempted.  They have some good offers too.  @Petriix can advise more about the MG EVs.

Grumpy_chap

watcher27 said:

I get "Van Benefit" = £3490 and "Van fuel benefit" = £666. And my tax code is 822T because of this.
Multiply those by 20% is £832.20, which spread over the year is £69.26 a month.

I checked, both of these BIK figures are correct, so the £70 is also correct.
MG do have some attractive offers so may be worth exploring as an alternative to lease.  

Petriix

The MG ZS absolutely doesn't get 140 miles real world range year round. On a cold rainy day you may only get around 100 miles (at 2.5 miles per kWh).

The MG5 will get 140 miles on the worst days and typically 40% more than the ZS, and even more at speed because (as well as having a bigger battery) it is more aerodynamic and has more efficient wheels. The 5 is also a bit faster and better planted to the road. The ZS suffers from significant roll in the corners and the soft suspension and higher centre of gravity really hurt the handling.

The BIK on the EV should be zero then 1% from April.