Company car's

[Dep]

As in a previous thread I announced I have had a promotion at work.

With this the boss has offered me a company car. I have been using a car to get to work as I went up there as a temporary thing. But now I am going to be permenant member of staff at that site I need to sort out what I am doing.

Here is the situation:
I travel from the town I live & used to work to my new work, this is a 60 mile round trip a day. I doing every other saturday on top of my normal working week. One of the mechanics has a lift in with me which he gives me £10 a week for.

The options:
-Run a company car. I'd have an Astra J SE 2.0CDTi 160bhp. It would have some Irmscher bits on it. On this I would pay tax for company car use & I'd have to sell the BMW.

-Run my own car. The boss is looking into the possibilty of having a fuel card but obviously a 13 year old BMW that does about 25mpg, this could cost me a fortune.

-Run the Combo van, this is my dad's suggestion as I wouldnt have to pay as much tax. This way I could afford to keep the BMW.

The issue with having a company car, is being in charge of the service department is my car gets lent out to service customers so I therefore go home in what ever is free to the service department. I'd be paying tax on an Astra when I could go home in a Corsa or Combo. Therefore I am out of pocket. Any other suggestions. With a pay rise I may be able to stretch to a newer car personally but this would have to be financed & where would I stand with my boss paying my fuel.

Any advice would be gratefully recieved.

[MEGA]

Well, if you get the full 52p per mile on expenses then its a no brainer. Keep your current car.

However, if you only get a subsidy not the max allowable ie the 52p, or if your mileage would be so high that you would only qualify for one of the lower amounts - then its much tougher a decision. I think its 52p on the first 10k? And then it drops quite substantially.

Do you HAVE to use your company car allowance to get a Vauxhall though? Its an allowance right. Now I understand that a vx must be massively discounted due to the job.. But hmm, push for a new 320d? :D :D

*Shrugs*

[Dep]

A company car has to be a Vauxhall. I am essentially the service manager for a Vauxhall main dealer.

I'll be doing about 15k in travelling to work alone.

[benny boy]

I will be getting a company car soon too. The company car tax is not that bad is it. I know car tax goes off value and emissions why dont you get a smaller cheaper company car.

[Dep]

I'm not sure I have a choice Ben. And the other thing is it will piss me off big time going home in a 5 year old van or a shitty corsa when I pay for an Astra. Its not a perk if you dont like what your driving! :(

[mikem]

Personally I'd use the combo. Not sure what the 52p a mile Mega is talking about ?

The ageed mileage rates with inland revenue are 40p a mile for the first 10k then 25p a mile after less any contribution the company make but this can't be claimed for commuting mileage to a permanent place of work.

[gie0320]

Should you paying the same tax??? Going from what you said it really sounds like you will driving a "pool car" as it will be used by others and not exclusive to you. In which case if its a pool car then you pay no tax

[gie0320]

The ageed mileage rates with inland revenue are 40p a mile for the first 10k then 25p a mile after less any contribution the company make but this can't be claimed for commuting mileage to a permanent place of work.
This is the normal rule Mike but it is also up to the employer if they wish to pay that extra pence per mile as I was getting with my previous employer.

[MEGA]

Personally I'd use the combo. Not sure what the 52p a mile Mega is talking about ?

The ageed mileage rates with inland revenue are 40p a mile for the first 10k then 25p a mile after less any contribution the company make but this can't be claimed for commuting mileage to a permanent place of work.

http://www.hmrc.gov.uk/mileage/employee-factsheet.pdf

http://www.hmrc.gov.uk/paye/exb/a-z/m/mileage-expenses.htm

According to this, Your employer can choose to pay more than that, but cannot claim back the rest tax free. In our case its 52p.

So I guess with our amount, 40p is fully tax deductable and the rest is purely thanks to the business. Little harsh though that. company is raping you somewhat if they don't provide any additional allowance imo..

Must admit I assumed the lower threshold had gone up slightly though, as we used to get 42p and now we get 52! (As of 18 months ago or so). Its not like our lot to be generous!!

Strange one. Apologies for the non-generic guidance anyway Lee.

[MEGA]

This is the normal rule Mike but it is also up to the employer if they wish to pay that extra pence per mile as I was getting with my previous employer.

What he said.

[Scholesy]

Lol@ the "raping you" Mega.

40p/25p is the maximum you are allowed TAX FREE.

Be careful as you are actually getting a profit on mileage which is taxable as Income!

[westside]

Should you paying the same tax??? Going from what you said it really sounds like you will driving a "pool car" as it will be used by others and not exclusive to you. In which case if its a pool car then you pay no tax

i thought a pool car is a car that leaks when it rains?

[gie0320]

i thought a pool car is a car that leaks when it rains?
Back on topic :p

[westside]

Back on topic :p

lol i'll be there

[MEGA]

Be careful as you are actually getting a profit on mileage which is taxable as Income!

True. Should fill it in on tax return.

[Scholesy]

If you complete a tax return then yes you should include it!

[MLaw]

So if u get a company car then u could end up driving home and back to work in any car/van that is drivable from the dealer? And u would have to pay company car tax on the Astra?
That is crap!
I have had company cars in the past, the good things are all servicing, tyres , mot, taxing, and insurance payed for. Bad things high tax to pay, if for personal use fuel tax also, cant mod or customise it, and it seems u may not be driving it often.
Also unless you have another car that is insured by you, if u have the company car over a year, then try and get personal car insurance again, you may not be entitled to a NCB as some insurance companies only honour it for the last year, unless u can get your company to contact their insurance and possibly get a letter stating that u drove a company vehicle without having any accidents for x amount of years.

I personally wouldnt ever go back to having a company car if i was offered one in the future. I run my own company and i wouldnt even claim my car on my company as a company car, as the tax man would take his rather large share!

[Dep]

Yeah I think that too Marcel. I just can't see it working for me & if I am paying £200-£300 a month for a car I can't afford my BMW.

My new plan I am looking into is this.

Buy a Peugeot 306 D Turbo. £700
Tax £200
Insurance £???

Then if the boss agrees to pay me a fuel allowance I could run the car Monday to Friday then let my little brother have the car at evenings & weekend. Its only group 5 insurance. Only insure it third party fire & theft with me as the main driver. I will average 330 miles a week. Where would I stand on fuel allowance?

[MEGA]

Hmm. Assuming the company will pay for your business miles then you get the first 10k miles at 40p a mile (You will definitely make profit on this, considering its a low powered diesel) and the rest at 25p a mile (probably brake even or still make a tiny amount on this). I'd assume that car will be 20p a mile or something to run.

So running your own car and expensing the fuel receipts back is probably your best option i'd say.

If you were to expense say 16,000 miles a year - then you'd be getting 4000 + 1500, £5500 back from the company for that mileage a year.


If the company gives you more than the basic amount back then the money goes up, but as above you are meant to declare any amount above 40p per mile as taxable income. For example if you (as me) got 52p / 35p, you *should* tell HMRC about the 10,000 * 12p and 6,000 * 10p. For instance.£1800. Of which they'd want (I guess) a share of £360 or so back from you.

Obviously, you can't expense your little brothers mileage though.. And if your commute is a set number of miles a week - then you need to be giving in consistent receipts. If you take the piss your company has every right to just stop paying you back. So if your car sharing, you do need to be careful with this one.

[Dep]

Hmm. Assuming the company will pay for your business miles then you get the first 10k miles at 40p a mile (You will definitely make profit on this, considering its a low powered diesel) and the rest at 25p a mile (probably brake even or still make a tiny amount on this). I'd assume that car will be 20p a mile or something to run.

So running your own car and expensing the fuel receipts back is probably your best option i'd say.

If you were to expense say 16,000 miles a year - then you'd be getting 4000 + 1500, £5500 back from the company for that mileage a year.


If the company gives you more than the basic amount back then the money goes up, but as above you are meant to declare any amount above 40p per mile as taxable income. For example if you (as me) got 52p / 35p, you *should* tell HMRC about the 10,000 * 12p and 6,000 * 10p. For instance.£1800. Of which they'd want (I guess) a share of £360 or so back from you.

Obviously, you can't expense your little brothers mileage though.. And if your commute is a set number of miles a week - then you need to be giving in consistent receipts. If you take the piss your company has every right to just stop paying you back. So if your car sharing, you do need to be careful with this one.

Well work is dead on 30miles from my house. I work every other Saturday. So there for my average is 330miles. So one week I'll need 300 miles & the next I'll need 360miles. Lewis would happily fill up the car when he needs it. So I assume I just need to work out how much fuel I need for my week & hand it fuel reciepts to cover that. How would I pay tax on that?

Being in the trade & using non genuine parts (bits from the scrappy too) I could run a car for next to nothing. Its just the fuel & insurance aspect.

[Hotcoupe]

Well work is dead on 30miles from my house. I work every other Saturday. So there for my average is 330miles. So one week I'll need 300 miles & the next I'll need 360miles. Lewis would happily fill up the car when he needs it. So I assume I just need to work out how much fuel I need for my week & hand it fuel reciepts to cover that. How would I pay tax on that?

Being in the trade & using non genuine parts (bits from the scrappy too) I could run a car for next to nothing. Its just the fuel & insurance aspect.

From your post above it seems that most of your usage of a company car is for the journey to and from your place of work.

As Mike said in an earlier post, you can't officially claim mileage from your home to your place of work or the return journey.
If you were to break up the journey, so for example you had to visit a client or perhaps pick up some parts on any of the two (commuting) journeys you make,then you can claim.

If you are running your own car will your company need the receipts?
The only reason they would need receipts is if they were reclaiming the VAT back from your business mileage.

Based on everything you have written about the company car scenario, if it was me, I'd kick it into touch, you will get no benefit from it whatsoever, in fact it would be more of a burden than any advantage.

[Black Sabbath]

From your post above it seems that most of your usage of a company car is for the journey to and from your place of work.

As Mike said in an earlier post, you can't officially claim mileage from your home to your place of work or the return journey.
If you were to break up the journey, so for example you had to visit a client or perhaps pick up some parts on any of the two (commuting) journeys you make,then you can claim.

If you are running your own car will your company need the receipts?
The only reason they would need receipts is if they were reclaiming the VAT back from your business mileage.

Based on everything you have written about the company car scenario, if it was me, I'd kick it into touch, you will get no benefit from it whatsoever, in fact it would be more of a burden than any advantage.
That was how I saw it as well,why not just ask for a slight increase in basic salary instead :)

[dodgyken]

There are online calculators that can help you through the minefield of whether taking a company car is a good or bad thing.

Home to "designated work place" isn't included - but in multi-location companies that can be sidestepped for tax purposes!!!!

Fuel cards are only worthwhile if you do a lot of personal miles - so be careful if you are offered one.

http://cccfcalculator.hmrc.gov.uk/CCF0.aspx

EG

An £18000 car - with CO2 of 160 (diesel) - with a fuel card for ALL fuel - for a 20% liability - £828 pA for the car, £777.40 pA for the fuel.

OR £70pcm for the car, and £65pcm for fuel

The latter @1.10 per litre = 59 litres @ 45mpg = 590 miles.

If you are 40% just double the pcm costs.

[Dep]

To clarify I was given a vehicle for the last 6 months to travel to work because I'd been moved from my local dealership to work 30 miles away. This wasn't my choice so he gave me a car & fuel to get to work. I was classed as still working in my local dealership therefore not paying tax.

I suggested to the boss that he paid my fuel to get to work at which point he said I could carry out with my fuel card I have currently. Where would this stand with tax points.

Basically I dont want a company car.