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company car offer
locoboy - 19/3/04 at 01:21 PM

Chaps would appreciate your advice / opinions here.

Work have offered me a company car, and i have never had one before, its only a 1.6 02 focus but better then my nail of a peugeot 205 D, its the ex-salesreps car with 50K on the clock.

Im currently doing 12K per year private miles and will soon be doing max 6-8K work miles.

Up to date figures are that it will cost me £425 per year in additional tax. The company will pay for all the fuel put into the car and i will pay the company 11.33p per private mile.

Does this sound like it would be beneficial to me, bearing in mind i would probably have to change my own car before the winter.

Ask me for more details if you need them.

Ta v Much.

stephen_gusterson - 19/3/04 at 01:28 PM

425 seems pretty cheap.....

I pay 275 quid a month for a W reg 318i SE BMW inc all fuel.

The tax is calc on the emissions from the car for car and if included, fuel.

Im guessing the focus is about 18% tax? So you pay tax on the new price of the car - about 14k? - then you pay your higer rate tax on that.

so

18% of 14,000 approx

div by 22% tax = your tax hit.


If you draw fuel, they count this as a 14,400 quid value (!) and it goes in the above equation, to give 28,400......


I recon 400 odd is a screaming bargain!!!! Doesnt your insurance cost that alone?


Consider an average car loses 2k a year, you need 400 or so quid of servicing, 250 quid of tyres, 400 of insurance, ..... its a no brainer?

atb

steve

Berticus - 19/3/04 at 02:00 PM

It depends what the alternative is:

a) Company car or Nothing - Take the car

b) Company car or cash - You need to work out whether the cash will cover all your costs.

splitrivet - 19/3/04 at 02:04 PM

Thats the biggest bummer the depreciation to find out that something you've just paid 20k for is worth about 6k.
Tax or not a company vehicle has got to be a bargain, I spose its better if you do get a say in what you get.
I know that you can be better off if you buy the vehicle and claim the mileage from your company but that depends on thier policy.
Cheers,
Bob

Deckman001 - 19/3/04 at 02:06 PM

It's the second year of my company vehicle, The lovelly people at the tax office have upped the tax on it this year 'as it is a year older and there for emits more emissions sir !!! ' Talk about screwing you for anything they can !!

Rant over, sorry

Jason

locoboy - 19/3/04 at 02:38 PM

Hi Chaps,

and thanks for the responses, Its acase of have the car or buy a new one, so there is no choice in what i can have.

Steve - You mention "drawing Fuel" do you mean not paying for any of your fuel private or business?

As it would stand i would submit a receipt for all the fuel put through the car then claim back the business miles.

It seems cheap to me too when offset against insurance at £300, tyres at £150, servicing at £300 (did it myself - Locost!) and the ever needed emergancy car cash pot of £500 for unfoseen breakages etc.

General consensus that i should go for it then?

Hellfire - 19/3/04 at 03:13 PM

pay private mileage yourself then it becomes much cheaper as you genuinely do less miles if it's your own money!

IR aren't daft!

I pay about 250/month Mazda6

Scotty - 19/3/04 at 03:14 PM

i'm going through someting similar at mo, but in my case its better to claim the mileage. 40p per mile is the correct rate to claim. as stated above the tax for company car benefits can be expensive plus then fuel benefit on top of that too. if you need more details chat to the tax office or give me a shout as i have a friendly accountant

Scotty - 19/3/04 at 03:16 PM

BTW its 40p for first 10,000 miles then drops to 25p (i think)

Mk-Ninja - 19/3/04 at 03:41 PM

First thing is that having a company car is a definite benefit for all the reasons given above, its just that different schemes give different benefits and if you have a choice of scheme it could be a greater benefit.
When I had a company car I had a spreadsheet that you filled in all your details and it produced the best solution for you. I have just searched everywhere for it but cant find it. If you could get a copy of a similar sheet it could help. If it turns up I will Email you.

stephen_gusterson - 19/3/04 at 06:44 PM

quote:
Originally posted by Scotty
BTW its 40p for first 10,000 miles then drops to 25p (i think)


thats true, and bear in mind you have to pay tax on it AND it only counts if its your OWN CAR not a company car

I pay tax on my fuel but can use as much as I like when I like in the UK only.

If you have a company car, you cannot use ANY fuel for your own purposes - the moment you do, you have to pay the full tax hit value at 14,400 at your max rate of tax.

So, if you are on 22% with a typical 20% emissions car you will pay 633 quid a year for fuel

on 40% tax you will pay 1152


some companies - like mine - will pay a lump allowance on a monthly basis into your salary - its 2k for me. That way you dont pay fuel tax.

The best way to avoid fuel tax is to get a fuel card from your company and log the miles you do for business. You need to be able to prove that you are not hving off fuel by also keeping reciepts for the fuel you pay for.

The IR are not stupid and if they think your drawing fuel you will get hit with the fuel tax.


running your own car in most cases just doesnt work out. I dunno how cash for car pays.

In my case I was offered 650 quid cash after tax to run a car. Sounds great dunnit? Once you factor in 100,000 miles in a 12k cost car that will be worth nowt at the end, all the fuel, servicing, insurance, blah de blah I sttod to save about 100 quid on the deal.

My next car is arrinving in about 10 weeks.

Its a 22k quid beemer 320d touring. Its gonna cost me 107 quid a month in tax.

its a bargain cos its a 15% emission diesel, and I take cash for fuel and dont have to pay for fuel tax.

right now I pay 275 a month drawing fuel for a 318.

you can work the system, or get screwed by it.

a car for 450 or so a year , lest face it - is a massive bargain.

total no brainer

atb

steve

[Edited on 19/3/04 by stephen_gusterson]

dblissett - 19/3/04 at 08:15 PM

get the car but remmber milage to and from work is private to a tax man
i have a picaso company car the tax is worked out on the list price of the car times a percentage based on emissions
you can get the list price and the % from the tax website mine costs £2538 per year reduction in my allowance and my private fuel is paid and that costs £2468 extra remmeber this is taken off my tax allowance so i pay about %25 of this
cheers dave