Can my company take my company car away without compensation.

CJMulligan · 14 March 2019 at 3:35PM

Hi,
I have had a company car for the past 7 years. I don't think it is written into my contract that I am entitled to one, but I have always payed tax and never had it questioned that I have a company car as lots of others in the office also have them.

Today (14th March 2019) I was told that as May/June I will not be getting a replacement and the lease on my current car ends. I have spoken to one of my colleges and he has not been told he is losing his.

My question is as this is considered a £5000 benefit should I be compensated or am I just essentially going to lose £5000 per year.

Thanks in advance for your responses.

nicechap · 14 March 2019 at 4:17PM

CJMulligan wrote: »

Hi,
I have had a company car for the past 7 years. I don't think it is written into my contract that I am entitled to one, but I have always payed tax and never had it questioned that I have a company car as lots of others in the office also have them.

Today (14th March 2019) I was told that as May/June I will not be getting a replacement and the lease on my current car ends. I have spoken to one of my colleges and he has not been told he is losing his.

My question is as this is considered a £5000 benefit should I be compensated or am I just essentially going to lose £5000 per year.

Thanks in advance for your responses.

Neither.

If only it was as simple as taking views taken from the internet to your boss to get your car or allowance back. No one here has seen what the business rationale is for the car being taken away,nor witnessed the conversation.

So it becomes a conversation/ negotiation between you and your boss/ firm about what replaces, if anything,the car. The value it brings to the firm enabling you to do your job and what you will do if it’s not replaced. You will obviously need to have worked out whether you want to stay or go and what level of replacement will swing your decision either way.

Don’t forget to take the taxable benefit of the car, so you will pay less tax if it’s removed and not replaced.

LilElvis · 14 March 2019 at 6:16PM

Perhaps your colleague hasn't been notified yet that he is going to lose his car because his lease has longer to run than yours. If you want to keep your car then it may be worth speaking to whoever deals with the leased vehicles at your company as I've known staff be able to buy their car with a large discount - usually the price that would be achieved for a trade-in.

getmore4less · 14 March 2019 at 6:40PM

Could be loads of reasons.

Often the main one is they don't want another lease liability

work out why.

TELLIT01 · 14 March 2019 at 7:20PM

I was in exactly the same situation following company restructuring. I received no compensation despite being told, along with others in the same situation, that I would not be financially worse off after the restructure. Basically two options - accept it or move on.
As suggested by LilElvis, it's worth investigating whether you can buy the car. I did that as I knew it had been serviced regularly and I had been the only driver. Got it at a very good price too.
Following the restructure they said we would have to use our own car for business purposes. I advised them that I wouldn't be driving to work because I'd have nowhere to park, so they had to keep getting in hire cars when I had to be away from site, which was pretty regularly. It certainly caused them plenty of hassle :-)

LilElvis · 14 March 2019 at 10:06PM

TELLIT01 wrote: »

I was in exactly the same situation following company restructuring. I received no compensation despite being told, along with others in the same situation, that I would not be financially worse off after the restructure. Basically two options - accept it or move on.
As suggested by LilElvis, it's worth investigating whether you can buy the car. I did that as I knew it had been serviced regularly and I had been the only driver. Got it at a very good price too.
Following the restructure they said we would have to use our own car for business purposes. I advised them that I wouldn't be driving to work because I'd have nowhere to park, so they had to keep getting in hire cars when I had to be away from site, which was pretty regularly. It certainly caused them plenty of hassle :-)

Husband's employer has obviously decided they no longer want the hassle of car leases so from January reintroduced the option of a car allowance (which had been scrapped 5 years ago) and downgraded all the leased car options to make them less attractive. I ran all the figures and worked out we will be far better off with the car allowance and reclaiming the tax on the difference between the HMRC rate and the company's mileage rate. Being very MSE I found him the car he wanted at less than 6 months old - saving £8,000 off the list price. He had the same car (but lower spec'ed model) and over the course of the four year lease the taxable benefit went from around £7k to £9k and is £10.5k for the current tax year.

Dazed_and_confused · 14 March 2019 at 11:04PM

My question is as this is considered a £5000 benefit should I be compensated or am I just essentially going to lose £5000 per year.

How can you lose £5,000 when you never had it in the first place?

You are losing the use of your company car.

And gaining between £0 and £3,000* more annual take home pay by virtue of not having to pay tax on the company car

* for most if will be between £1,000 and £2,000

Marcon · 14 March 2019 at 11:55PM

CJMulligan wrote: »

I don't think it is written into my contract that I am entitled to one, but I have always payed tax and never had it questioned that I have a company car as lots of others in the office also have them.

Maybe begin by reading your contract and finding out for sure.

The fact others have cars is completely irrelevant.

TELLIT01 · 15 March 2019 at 9:57AM

Dazed_and_confused wrote: »

How can you lose £5,000 when you never had it in the first place?

You are losing the use of your company car.

And gaining between £0 and £3,000* more annual take home pay by virtue of not having to pay tax on the company car

* for most if will be between £1,000 and £2,000

I'm aware that the tax situation around company cars has changes since I had mine, but I felt there was both a financial and 'stress' benefit from having a company car. I didn't have any of the running costs or depreciation of owning a car, and another car would always be provided if the company car was off the road

MEM62 · 15 March 2019 at 10:52AM

If the car is not a contractual benefit then you are probably on a hiding to nothing. As you have had the car for so long you could make an argument on the basis of 'custom and practice' but you might not get very far with that.

I've just given mine up due to a combination of the tax on it becoming onerous and, over the years, the company reducing the quality of the cars I could lease. Back in 2007 I was paying £180 in tax and driving a high spec S40. My last car was a Seat Leon which cost be £420 a month in tax.

I am now driving a 320i which, overall, will cost me around £100 a month over and above the tax saving to operate but I am happy with that.

My employer offered no compensation for giving up the car, which was fine with me, but now they are panicking because they have just realised that they do not have a solution in place for my business mileage. I am expecting a conversation on a car allowance sometime soon

System · 15 March 2019 at 12:38PM

Dazed_and_confused wrote: »

How can you lose £5,000 when you never had it in the first place?

Because some people are given a car instead of a cash salary increase.

Can my company take my company car away without compensation.

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