HDAV Posted October 12, 2016 Report Share Posted October 12, 2016 I'm applying for a job with my employer in a different dept. I currently have a small van and its 100mile round trip to the office. So no commuting but no private use so I have a car as well (3-4K usage annually) Car is on last legs and mot due list of faults going to run several hundred minimum. When I took the job some years ago I estimated van was worth £4K of salary New position includes company car and mileage at hmrc rates 9p/11p/13p depending on engine. Now I hope to have some input into car but likely be something like a insignia or Mazda 6 (these are current company car types) I fancy a Volvo v60 or v40 but looking for input better options the company but and run the cars rather than leasing so often buy used not new Never had a company car before need to know the score as the salary isn't much better and could mean a real terms reduction at the end of the month (will be giving up overtime in favour of commission) Quote Link to comment Share on other sites More sharing options...
Glenlivet Posted October 12, 2016 Report Share Posted October 12, 2016 When I had company cars in the past I ended up on a negative tax code, be aware! Quote Link to comment Share on other sites More sharing options...
Davyo Posted October 12, 2016 Report Share Posted October 12, 2016 (edited) Online calculator on HMRC website simple to use.You may be surprised depending on the car you choose.Mate has a Golf bluemotion costs him about £85 per month with a reduction in his code.£85 for a brand new car with insurance,servicing,tyres ect thrown in. Dont go for a silly car though.Look at Co2 amd list price this will be the key to getting it right. The other change on the horizon though is a lot of companies are now salarying the car as opposed to putting it as a BIK on a P11D Edited October 12, 2016 by Davyo Quote Link to comment Share on other sites More sharing options...
Adge Cutler Posted October 12, 2016 Report Share Posted October 12, 2016 100 mile round trip Do you have a fuel card and they pay your Private fuel also. Many companies do not so be careful. I had a company car for over 25 years until I opted out of the company car scheme and bought my own. The Business mileage I was doing was limited and the tax crippling me, as Glenlivet said I ended up on a negative tax code.!! If you are doing big company mileages then a CC generally works in your favour. However if you are just doing a daily commute and you don't get private fuel the mileage costs could be significant Personally If I were in your position I would ask for a car allowance rather than a company car and get a frugal diesel which will return 60-65 to the gallon. I did all the sums and it worked for me...and I've never regretted it. Quote Link to comment Share on other sites More sharing options...
Zetter Posted October 12, 2016 Report Share Posted October 12, 2016 Good advice from Davyo above. From my own experience and I have had a company motor since 1996. 1) if you are doing a lot of mileage to and from the office and its your actual place of work be careful as its considered private mileage by HMRC and most companies. No issues if you are based from home as all trips are business mileage but I know a couple of people who got caught out on this. 2) Go for the lowest CO2 you can get if you can get on with the car, as all the benefit in kind on your yearly tax on company cars is calculated from its manufacturers recommended value and its CO2 emissions the lower both are the less tax you will be billed for. 3) IF you are a 40% tax payer also watch out as the benefit from a company car will be calculated based on that. The HMRC website shows you for a given car the deductions made to your tax based on both tax rates 20% and 40%. Be sure you know where you will end up at the end of the tax year especially if there is bonuses involved as you can (as I did last year) find yourself with a hefty tax bill if they think based on your regular salary you were going to end up in the 20% tax bracket and you dont due to a good bonus from work or a pay rise. 4) Also your car as its counted like most stuff essentially as earnings can also cause you issues in some cases with the Child benefit if if boosts you over the cap with that. In my opinion they are still well worth having as if it get nicked, the engine falls out or you have other mechanical issues that are not covered by warranty its not generally your problem and you get a replacement and off you go. But the tax pitfalls for the unwary can be harsh and there is no messing with HMRC. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 12, 2016 Author Report Share Posted October 12, 2016 The 100 mile trip to the office is private mileage..... I won't be there all day every day but my current fuel is covered by the company due to the nature of the current vehicle. Mazda 6 2.2d would be about £80 a month in tax (20%) but I'll be paying £200+ for fuel so £300 a month costs more than I am on now. Quote Link to comment Share on other sites More sharing options...
Zetter Posted October 12, 2016 Report Share Posted October 12, 2016 Vans are always a bonus as a company vehicle if you only use them for business and getting backwards and forwards to work as they dont count with the tax man as a benefit in kind. You will always lose out if you move to a company car as they dont have that dispensation. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 12, 2016 Author Report Share Posted October 12, 2016 Vans are always a bonus as a company vehicle if you only use them for business and getting backwards and forwards to work as they dont count with the tax man as a benefit in kind. You will always lose out if you move to a company car as they dont have that dispensation. Yeah that's the issue its trying to work out if I'd actually be better off or not Quote Link to comment Share on other sites More sharing options...
Zetter Posted October 12, 2016 Report Share Posted October 12, 2016 Yeah that's the issue its trying to work out if I'd actually be better off or not From previous experience worse off unless it allows you to drop to one car for the household i.e the company car for everything. I used back in the day to have an Astra van and just used it for work with the Mrs having her own car. Now I have a company car and she still has her own car so you dont get any benefit and pay more. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 12, 2016 Author Report Share Posted October 12, 2016 At the moment I have my car and company van My car is on its last legs, but don't use it a lot, I would have just company car but paying my own fuel does put me off £80-£100 month extra tax isn't too bad but the £200+ a month fuel is the bigger issue as its like loosing £240 is salary Quote Link to comment Share on other sites More sharing options...
ferguson_tom Posted October 12, 2016 Report Share Posted October 12, 2016 Is it a car allowance and they then you claim back the fuel you use on their behalf? Or a company car and they charge you for the fuel you use privately? I have just got a company car and even though it is horrible paying £250 a month to the tax man if you look at it the other way in that its just £250 for a fully maintained car with none of the hassle its not bad at all really. You can get cars a lot cheaper but on the tax but i treated myself to what i wanted. Quote Link to comment Share on other sites More sharing options...
Zetter Posted October 12, 2016 Report Share Posted October 12, 2016 From the way you describe it mate you would be worse off. If you dont use your other car a lot and it goes bang you can always pick up a cheap little runner to replace it for a one off low cost. From what I can see you are going to get thumped on tax for having the car and also get get the extra cost of fuel which you are not paying at the moment just to get to work and back when you have to. So unless getting rid of your current motor is going to save you equal to or more than the fuel and the company car (i.e. not paying car tax, insurance and maintenance as you need to consider these outgoings as well) is going to cost you you are going to be worse off on an equivalent salary. For me its different as if I opted out and took the cash I still have to buy a car and our company stipulates what its CO2 is and its got to be less than 5 years old so you cant just buy something cheap and cheerful. Also I have a fuel card for private mileage and even though this thumps me as well on tax I do a lot of mileage personally as I have some long distance shooting permissions so I am still better off. Quote Link to comment Share on other sites More sharing options...
Adge Cutler Posted October 12, 2016 Report Share Posted October 12, 2016 Im afraid whatever way you look at it the Company Car isn't really the Perk it used to be. What swung it for me was the fact that after all the sums, equations, calculations had been done I was still paying substantial tax on a car I didn't own. Now even after paying the equivalent amount of tax in fuel and finance I actually own something of value. ( accepting appreciation) and can do with it as I wish. This was a big consideration as I begrudged paying the Taxman for something that would never be mine. Quote Link to comment Share on other sites More sharing options...
MrM Posted October 12, 2016 Report Share Posted October 12, 2016 Also remember if you have a car allowance and get you own car, you need to add business to your insurance and not just social domestic and commuting to one place of work. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 12, 2016 Author Report Share Posted October 12, 2016 (edited) the car is company owned and supplied to me as a benefit they own it I fuel it and reclaim fuel costs at hmrc rates (9/11/13p) per mile of business mileage. I would be "office based" 52miles from my house but expected to take meetings and appointments all over the country. Insurance isn't an issue as generally had business cover anyway used to do £30k a year in my own car at 45p/25p a mile rates Edited October 12, 2016 by HDAV Quote Link to comment Share on other sites More sharing options...
Paul1440 Posted October 12, 2016 Report Share Posted October 12, 2016 I too decided not to continue with a company car.. it's too expensive once you tale the tax into account and the mileage paid as set by the goverment didn't cover the fuel cost. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 12, 2016 Author Report Share Posted October 12, 2016 (edited) mileage paid as set by the goverment didn't cover the fuel cost. That's my biggest concern. Car allowance is just salary paid in lieu of a car that is meZnt to spent on a car? If you have car allowance can you claim mileage? Edited October 12, 2016 by HDAV Quote Link to comment Share on other sites More sharing options...
Zetter Posted October 12, 2016 Report Share Posted October 12, 2016 (edited) If its anything like our firm when you get an allowance i.e say £500 added to your salary this is for you to run a car i.e. buy it (if needed) tax it, maintain it and fix anything that goes wrong with it. You can only claim mileage at the 9/13/15p per mile rate for business mileage i.e. that that is not to and from your nominated place of work. This works well for people such as my boss who is based at my site but comes here once a week or less so all other mileage he does in works time he can claim back as business mileage. If he was here every day that trip to and from his house (circa 60 miles each way) would not be claimable as its his commute to his normal place of work. If the company did pay his fuel for for this for example he would have to pay tax on that as well as its considered a benefit in kind by HMRC. Edited October 12, 2016 by Zetter Quote Link to comment Share on other sites More sharing options...
Rupert Posted October 13, 2016 Report Share Posted October 13, 2016 I have just got a company car and even though it is horrible paying £250 a month to the tax man if you look at it the other way in that its just £250 for a fully maintained car with none of the hassle its not bad at all really. This is the crux of the whole thing,only works if you fancy the new vehicle and were going to buy it anyway. there are a lot of costs to running a vehicle beyond fuel,tyres sevicing etc that dont get included while doing the maths.Our car costs us 5p per mile in tyres and servicing,25k miles a year its a decent chunk, but often forgotten about . 3 years ago The Wife gave back her company car and took extra salary, with the reduction in tax we now effectively have a fully funded car that is much nicer than before, But still some bills still cause a sharp intake of breath. My neighbour runs that mazda for the last 5 years, loves. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 13, 2016 Author Report Share Posted October 13, 2016 Ferguson_tom what did you go for? I doubt very much I'll have a free choice in car and possibly none..... Quote Link to comment Share on other sites More sharing options...
ferguson_tom Posted October 13, 2016 Report Share Posted October 13, 2016 Ferguson_tom what did you go for? I doubt very much I'll have a free choice in car and possibly none..... Went for the new Mondeo Titanium with X pack plus few extras, but the tax is particularly high as its the 210PS twin turbo diesel. If i went for the standard 150 in manual it would of been around half that. If you are doing high mileage then the company car IMO is still the best option, when i looked back over the amount i had actually spent on cars in previous jobs and doing considerably less miles it was around £2-3k a year when you take into account road tax, insurance, depreciation, servicing etc and that was on cheapish motors (circa 5k.) If your running dirt cheap bangers then yes it is expensive compared to a £500 nissan micra but i think you would struggle to find a cheaper way of motoring if you need a decent and reliable motor for your job. Everyone i know with a car allowance who does high mileage says it doesn't work out as well as they thought, i think it works better if you do lower mileages. (my idea of high is 30-40k, low 10-20k) My company do the fuel differently where i pay back what i use rather than claim it back off them. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 13, 2016 Author Report Share Posted October 13, 2016 Wow £250 on a Mondeo! Quote Link to comment Share on other sites More sharing options...
ferguson_tom Posted October 13, 2016 Report Share Posted October 13, 2016 Wow £250 on a Mondeo! Drive it worth every penny! Quote Link to comment Share on other sites More sharing options...
four-wheel-drive Posted October 14, 2016 Report Share Posted October 14, 2016 I was talking to a chap today he has a little Smart car that he runs as a company car he said they give him 10p per mile and the Smart only costs him 5p he said that he used to have a 3ltr car but finds this little smart so cheap to run he loves it. Quote Link to comment Share on other sites More sharing options...
HDAV Posted October 15, 2016 Author Report Share Posted October 15, 2016 (edited) Just been looking at Volvo v40 d2 £52 a month in tax...... Or d4 cross country about £90 20-30k a year in smart car..... Hmmmmm no thanks! Edited October 15, 2016 by HDAV Quote Link to comment Share on other sites More sharing options...
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