Electric company car

Nervsmomma2022

Hi im being made a company director and as a perk to the job been told i can have up to 35k against a new car or the cash alternative but not sure how the cash alternative would work. Not likely to get the 35k anytime soon im assuming. 

Any help in how to decide which way to go? I have about 14k debt but also need a new car my current car i have had since basically new seat ibiza 1.2 sport which is done. I dont do big miles but might increase now when i become director. I lives 7 miles from work

Grumpy_chap

Nervsmomma2022 said:

Hi im being made a company director and as a perk to the job been told i can have up to 35k against a new car or the cash alternative but not sure how the cash alternative would work. Not likely to get the 35k anytime soon im assuming. 

Any help in how to decide which way to go? I have about 14k debt but also need a new car my current car i have had since basically new seat ibiza 1.2 sport which is done. I dont do big miles but might increase now when i become director. I lives 7 miles from work

That is an odd phrase for an employer to use "£35k against a new car or the cash alternative".  You may wish to clarify exactly what the business intends to be understood from that phrase.

It sounds like the employer is allowing you to buy any car you wish and they will contribute £35k to the cost.  That is not a common way for things to work - it is likely to be expensive for tax for the individual and the employer unable to take advantage of tax breaks.

It is more common for employers to express the car options as "monthly lease rate up to £xxx" and there may also be a stipulation on the lease company.

Should you choose the "cash alternative" that is also more likely to be a monthly amount than a lump sum - a point which you seem to have noted in any case.

If you are ale to take a company car and that car is an EV, the BIK rates are currently very low.  Anything could change in the budget on Wednesday.  I doubt you need to make a decision before Wednesday.

Ectophile

If they give you the money in the form of a monthly allowance or a lump sum, it's liable to count as taxable income.  You could find that the tax man takes a large chunk of that money you were hoping to put towards a new car.

Nervsmomma2022

Ectophile said:

If they give you the money in the form of a monthly allowance or a lump sum, it's liable to count as taxable income.  You could find that the tax man takes a large chunk of that money you were hoping to put towards a new car.

I think the company is buying the car

macman

Nervsmomma2022 said:

Ectophile said:

If they give you the money in the form of a monthly allowance or a lump sum, it's liable to count as taxable income.  You could find that the tax man takes a large chunk of that money you were hoping to put towards a new car.

I think the company is buying the car

So how would the cash alternative work? You really need to get some detailed info first before you make any decision. It's likely too late now to pre-empt any Budget/new tax year implications anyway.

doningtonphil

And if it an electric company cr, you need to ask them if they sre using a Salary sacrifice scheme.  If not, can they do so?

Ectophile

Nervsmomma2022 said:

Ectophile said:

If they give you the money in the form of a monthly allowance or a lump sum, it's liable to count as taxable income.  You could find that the tax man takes a large chunk of that money you were hoping to put towards a new car.

I think the company is buying the car

Not if the OP goes for the cash alternative.