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  • FIRST POST
    • Roley32
    • By Roley32 16th May 18, 12:24 PM
    • 2Posts
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    Roley32
    Car allowance - BIK savings
    • #1
    • 16th May 18, 12:24 PM
    Car allowance - BIK savings 16th May 18 at 12:24 PM
    I currently have a company car and have worked out that as a higher tax payer I am paying circa 400 per month in tax. I have the option to take a car allowance of 500 per month (300) after tax.

    My question is, if I choose to take the car allowance and then lease a car instead, would the BIK be adjusted straight away, meaning I'm 400 better off per month? I was thinking that this would allow me to lease a car for up to 700 per month.

    Of course I would need to cover insurance, maintenance etc but it seems like a good option to get a better car.
Page 1
    • Car 54
    • By Car 54 16th May 18, 1:11 PM
    • 2,931 Posts
    • 1,862 Thanks
    Car 54
    • #2
    • 16th May 18, 1:11 PM
    • #2
    • 16th May 18, 1:11 PM
    I suspect it won't be adjusted automatically, you'll need to call HMRC.

    BTW it used to be the case that any fuel benefit was taxed as a full year, with no pro-rata adjustment, but that may have changed since I gave up my company car.
    • AdrianC
    • By AdrianC 16th May 18, 1:18 PM
    • 17,376 Posts
    • 15,708 Thanks
    AdrianC
    • #3
    • 16th May 18, 1:18 PM
    • #3
    • 16th May 18, 1:18 PM
    Whether it's immediate or not depends on your payroll dept. It should be. It'll balance out over the tax year, anyway.
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