pbee

The company I work for was bought by a major telco player recently and my work transport situation could be changing.

I run a car specifically for work use.

Last year I did 29k business miles in my own car and claimed 47.5p per mile. Absolutely laughing. As this more than paid the upkeep of the car and depreciation.

The new company pays 30p per mile, and my role is changing so I will be doing less driving, Im estimating 12k miles per year.

I have done some sums and worked out the following. This is based on buying on finance a new cheapish car every 3 years. (depreciation based on my current 306).

12000 x 0.30 = £3600 per year.

Costs
Fuel 30mpg (averaging) £3.40 per gallon = £1360
insurance = £600
Road Tax = £165
Runnin Costs £ 500
Depreciation = £3600
Finance £400

= - £ 2590

Now as the depreciation cost matches the amount I get back in mileage claims im in deep dodo. Are these sums reasonable have I calculated something wrong ??.


So do I run a older car without finance and less depreciation or do I go the company car route ??.

ProperCharlie

If you go down the compnay car route you will end up paying a few grand in tax, so it probably will end up similar to what you worked out for milage. Sometimes you get a fixed allowance added to your salary in adition to the mileage, which obviously makes it more attractive. On the tax side, depending on the C02 rating you will be paying between whatever the bottom of the scale is (didn't bother looking that far down )and 35% (Subaru Impreza STi Category ) of the list price of the car as a taxable benefit. So if you are already at 40% bracket you can end up paying 40% of 35% of the list price. Nice one, Gordon .

TopBanana

Might be worth buying a car that won't depreciate so much? I've just bought a 2000 Passat for £7400 and I won't lose £3600 on it this year!!

tonybooth

pbee

I understand that mileage rates for using your own motor are set by those nice people at Customs & Exise.

I can't remember the exact figures and limitations, but you are being paid way above what they specify and could therefore be liable for extra tax.

I recall that the upper figure (pence per mile) is only allowed to be paid for the first 18,000 business miles in any one tax year. After 18,000 miles a much lower rate comes into play.

Might be worth doing some digging before making a descision. Personally, I gave my Company car after 12 years due to the emissions based system of taxation which menat I would have been much worse off.

Cheers

TONY

Newbie123

The tax free mileage rates for 2003/4 ....

40p per mile up to 10000 miles and 25p per mile thereafter.

so for 12000 miles you can claim for £4500. If the company only pay you 30p per mile which gives £3600 then as long as you have a record of your business milage you can claim the extra £900as a deduction on your self-assessment tax return.