company car - tax question

collierd

Hello

I have a question regarding company car tax that looks to me as though I am paying twice

I have an allowance (400 per month)
I can also contribute 10% more but this comes out of my pocket

We seem to have this system where you not only pay tax on the car plus extras up to 400 per month (completely understandable), but you also pay tax on the extra (which could in theory be 40 per month)

So you could pay 480 a year own contributions
AND tax on what you get for the 40 per month (eg. could be 4k extras @ 40% with Co2 @ 20% - 320)

So, annually, you are actually paying 800 for 480 worth of extras using this example!!

Is this right?

Thanks you for any advice

dc

Elaine_Wilson

The car benefit is calculated on the list price of the car. I assume the £400 per month is the maximum the company is prepared to pay to lease a vehicle for you. So if you pay extra then you will receive a more expensive car and so the benefit will be higher.

But once the benefit has been calculated it is reduced by the amount of your own contribution. So you shouldn't really be out of pocket.

collierd

Thanks for the advice

At the moment I drive a BMW 320dES
The list price was 20825 - it's significantly higher now as they have improved and put prices up

I contribute 17 per month
Yet I am paying tax on 20825 - this is what my tax code is based on and what is shown on my P11d

Due to my contributions, should I be looking for some form of rebate?
If so, should my company handle this or the Inland Revenue?

dc