Company Cars General Info

Dime_Bar

Have my fingers crossed at work for a promotion which would include a company car, plenty of people moan about the cost of tax etc but I am stuggling to find out the real cost to me.

I have used a calc on Which and the results are as below.

2007/2008 2008/2009 Percentage charge19%20% Benefit in kind£3,123£3,287 Tax payable at 22%£687- Tax payable at 20%-£657 Tax payable at 40%£1,249£1,315

I am a 20% tax payer so that would be £657 a year, which is about £60 a month, I would be paying for personal milage so I dont belive there would be any extra tax there. So what are the hidden costs? if there are any as £60 a month seems pretty low.

PS Sorry if this should be inb one of the Tax boards

gingerdad

Thats about right

Regards

GD

Dime_Bar

cool just what i wanted to hear.

nutmegman

be careful the value of the car doesn't tip you into the 40% tax killer, i think they add the BIK value to you salary to work this out......

Also, if you are on tax credits consider that also

AdrianHi

Yep that looks right. You have been rewarded for picking a relatively low CO2 emissions car.

Dime_Bar

Well thats fingerts crossed on getting the job then. as for the car I have no choice over it but it seems the company made a good choice.

Thanks for the heads up Nutmegman I dont think I will be troubling the 40% limit any time soon though.

VickyA_2

My DH has a company car. Like you, he couldn't quite see where he was losing out. Recently, the company has had to pay approx £500 for new tyres, then there's the servicing and tax............... don't forget the depreciation too.

mitchg

Just a couple of sites to look at for info
http://cccfcalculator.hmrc.gov.uk/CCF0.aspx
http://www.comcar.co.uk/
http://www.vcacarfueldata.org.uk/
I dont think you get the cost as a benifit in kind added to your earnings i think it works like this:

Tax code is reduced to accommodate car so likely to drop personal allowance from £5435 to a likely £2160 so your code will drop from 544 to 216 for example this will mean no tax payable on your first £2160 earnings then 20% tax payable up to £3600 and then above £36000 all earnings will be at a taxable rate of 40%.
So infact if you earn less than £3600 you will not pay it on a 40% basis but go over and the amount up to the benifit in kind value will be charged at the 40% rate if this makes sence.

Dime_Bar

Thanks all

Well my fingers are definatly crossed now.