Jza

I've got to decide now - order to be placed in next month.

I can have a 3 Series 320d or Jag X-type D.... not exactly exciting but better than a rep-mobile....

OR i get a £450 car allowance + 40p / mile (And buy a new Scooby)

Im doing about 15000 miles a year. Any wiz know about which option to take? Assume im a 40% tax payer...

What do i need to know? Whos been in a similar position and what did they chose?

Thanks

Jza

BrynO

I had a company car for many years, opted out in June, with a £500/mth allownace and £200 saved on not paying tax, plus my fuel paid (tax free) at 40p per mile I did the numbers to death on this but could not really make them work on a new or near new WRX, so I bought a 'cheap' 3 year old WRX, which for me was the only option which made financial sense. Looked at leasing, but again best I could get was £600 plus per month, add to that insurance and contingency and it's an expensive option, but gives the confort of not having the worry of your own car. Personally on £450 I dont think its a great option, unless you really want the Scoob and are prepared to subsidise it if you need to.

mrklaw

I can actually never understand the economics not to opt out.

Its not just the £450, you are probably going to pay around £100+ in tax on the car you choose, so thats more like £600pm.

Plus all your business mileage is paid for at 40p per mile, which is plenty to cover petrol and wear/tear etc, especially for only 15000 miles a year, not too much over average.

£600 a month would surely buy a nice enough WRX over 3 years?

Jolley

my MY03 WRX costs:

Finance £390/month
Insurance £100/month
Servicing & Maintenance £200/month
(Mods.... upto you!!)

Total £690/month for a brand new UK WRX

I do not have the luxury of 40p a mile for petrol (have a fuel card, and pay for my private mileage).

It costs me more than a company car would, but the fun I get out of it is priceless.

Mark Miwurdz

Company car every time....

but then I do 50,000 miles a year of which I could only legitamately claim 15,000 as business miles.

My biggest single cost in motoring is depreciation and any tax penalties for benefits in kind are massively outweighed by the company underwriting that depreciation. Of course, this model only stands true with a sensible (>200) CO2 output.

Best of luck

Cheers
Kav

PS - You might want to take a look at http://www.cashorcar.co.uk but it is pretty arbitary in its calculations. If in doubt, speak to an accountant.

Dazza's-STi

do the figures right m8...

you don't get 40ppm... the IR state 40ppm as the taxt rate for running your own vehicle...
What normaly happens is you claim a mileage rate from the company... in my example 12ppm this leaves 28ppm upto the 40ppm tax limit... so you then claim 28ppm for the first 10000 miles... anymileage after then the limit is then 25ppm so I claim for another 10000 at 13ppm
so in my case thats £2800+£1300=£5400 taxable benefit... i.e. of my tax code...
So in the end i get 5400- 40% =2160 = 180 per month on top of the car allownace you get from the company... that... don't forget is also at your personal tax rate! so £400 per month = £4800 - 40% £2880 = £240 per month in your pocket...

Hope that helps!

Dazza

Sonic_Danny

After 3 years that WRX will be paid for though, and would be worth at least £10k so thats £10k in your pocket and start again or put it towards an even better car!

Diablo

But you get taxed on the £450, which at 40% tax means only £270 in your pocket. Sure, you don't have the tax on the car at say £100 per month, so you are £370 better off, not £600.

£370 a month for a (presumably) serviced, insured, re-tyred, etc 320d or Xtype is a cheap car mate.

Oh, and Dazza, don't talk bollox mate many companies can and do pay 40p per mile mileage expenses (for the first 10,000 miles and 25 p per mile thereafter).

Mine does

Dazza's-STi

I Wasn't talking bollox m8... that may be the case... but you then can't claim AMAP allowance, "tax back"...for any mileage... Muppet!

if a company pay the full 40ppm then you cannot claim the AMAP... if you get more then this; then thats benefit in kind and it will attract tax at your tax rate... Although few companies pay the full 40ppm
READ IT... it also states IN MY EXAMPLE!


Allowance...
From April 2002 a statutory system of tax and NICs free mileage rates called approved mileage allowance payments (AMAPs) will be introduced. The approved rate will be the maximum amount which can be paid to employees without attracting a tax or NICs liability. Different rules will still apply to the self employed and volunteer drivers

Diablo

And your point is

You said

I said

And thats bollox how exactly?

Of course you can't claim back the difference between what you get paid and the 40ppm limit if you get paid 40 ppm.

You seem to make a big deal of being unable to claim back the to the level of the full allowance - whats the issue of you're already getting it paid?

What would you rather have - 28p in your hand now, or as part of a deduction against tax to be paid some months down the line?

And I'm the muppet?

Its not rocket science is it

Maybe you shuold read my post before flying off on one.

Vonzack

When I had the option between company car and car allowance, I chose the allowance. My reasoning was that I didn't want the company car offered and that I'd probably buy what I wanted at my cost anyway, so why not have the company subsidise me for it.

Crazy Legs

Its great when you first opt out but the novelty soon wears off. It costs a small fortune to run a Subaru in relation to other cars.

I purchased a low mileage MY00 UK Turbo 18 months ago to use as my company car. The car was mint when I got it, not a mark on it.
Shortly after starting to use it a 7.5 tonne wagon hit the back of it, so I had to drive round in a Punto of all cars for 6 weeks while the impreza was repaired.

18 months on, the car has some tasty stonechips, a cracked windsreen, and a broken PIAA lamp lense. Its still got sensible milegae for the year but has depreachated like I don't know what. The service costs are always higher than predicted as well.

I could go on and on but I would say to anybody considering a Scoob as a company car, "DON'T DO IT"

Anyway the 320d is one of the best diesel engines around and has got relatively good power. OK, so you won't do a Porshe of the lights, but you can sit in the outside lane at 80mph on a clear motorway and get away with it.

bits'n'pieces

I need a company car due to the mileage i do per year, the last company impreza was on a W reg, I swapped it for (Flame suit on) a Civic type R as the tax works out to £153 per month if u pay 40% against £348 if u get an impreza and now the wonderful labour government is talking about raising the taxes on company cars if the emissions are above 220per km (CTR 214 and Impreza is 239 i think, u must remember that you'll have the car for as long as the lease maybe 36 months.....). Not as quick ok, but past 60 theres not a heck of a lot of difference apart from the roundabout thing . Thats just my pennies worth.

Dazza's-STi

Firstly... I didn't start by saying your talking bollox! nor did I say you were! YOU DID!

You don't need to get the 28p in three months... Durrrr... as it is I claim it pro-rata and get it each month calculated on 25k miles a year!

As for the muppet... you said it!

Since i was trying to give some advice I did so, using the example of getting less than the 40ppm... as this is NORMAL in 95% of companies! Mine being one of them that has 5000 employees in the UK.

Clive the Brave

This chit chat is almost making me wet myself laughing....................
Something I've been thinking about for some time.

-my situation is.
I took the company car, got the golf GTi with some options, paying £370pm(£550 is the cash option)per month
Tax on the car is: £230 per month
Fuel card for all milage: £150 per month

My second car is a WR1, fun miles only.
But when the cash option comes round again (March 2005) I'll be taking the ££££££ and getting myself something for work and doing the run to the shops

Worked out that the Golf cost's me around 7k each year hard cash, if not more, what with the payments, taxman, fuel card, ect............

Note!!!
Do take a look in to the milage repayment if you take the cash option, I was thinking our's is 40ppm but if you take the cash we only get 12ppm.

The company car is no longer a benefit, not like is was in the good old days.

What you want to do is.......
Get a crap car for work and a play car for home :>)

thats my bit for a Weds

Diablo

OK, fair point. I did..LOL...but your post wasn't clear

Seing as how this is now a pissing contest the last place I worked employed 16,000 people in the UK and was part of the worlds largest financial services organisation.

They paid 40ppm for own car use. In fact its been the same everywhere I've ever worked. Ironically (or is it comically) Jza's employer is also paying 40ppm (as he states) so your whole example is rather a waste of time, in this context

T-1000

I took the cash option too. Fine when I owned a focus but a bit diffrent with the scoob. I get £4500 allowance per year and 15p a mile which seems very low compared to you guys. Can I still claim the 25p difference from the Tax man even though I get an allowancepaid each month? I only do about 1500 business miles a year but its better in my pocket.

talizman

iTrader: (1)

How the hell does your MY03 WRX cost you £200 per month on servicing/maintenance?

BrynO

T1000, yes you can, just fill in the relevant section on your next tax return. From the research I did working on my companies car policy, many companies pay 40p only to those they are not already paying a car allowance to in lue of a company car, for those paid a monthly allowance the rate per mile is much less, more like the 12p you get, and really only covers the fuel costs. Anyone who gets a good monthly allowance plus 40p a mile is certainly on to a winner! Well worth claining back the difference from the tax man, be a nice bonus at year end.

T-1000

Thanks BrynO but never done a tax return. Can I send a letter to the Inland Revenue with my mileage details?

Jaybird-UK

I took the company car option, its a MY03 WRX

Downside is I cant modify it apart from stainless exhaust so I may opt out next time around.

BrynO

If you give them a call and explain your position and estimated miles for the current tax year, they may adjust it for you now, or you can do it retrospectivly at the end of the year. Not sure what the cut off is for claiming back previous years, but they will let you know. Just be sure you keep your log of the miles and amounts you have claimed from your company in case the IR ask for some back-up (which they may or may not need).

pbee

you can ask to complete tax returns for upto 4 years in era's, But rememeber you have to complete the tax return on all aspects not just the bit you want to claim for the fuel, so you may end up paying them more money, for example if you are a 40% tax payer but do not decalre interest on savings and bank accounts, as the banks tax at basic rate.

Fangoria

iTrader: (1)

Hmmm some odd comments

Having worked for many companies and being a Chartered accountant and Financial Advisor it is very unusual for companies to pay YOU 40ppm and give you a car allowance........ unless they are very, very stupid........please give me the name of the company as I would love a job there PLEASEEEEEE.

If you get a car allowance you will usually be given circa 12p a mile for a diesel and about 10p a mile for a petrol.

As Dazza correctly stated, his comments are the most intuitively factual with a claim back from the IR for the difference (depending on mileage driven)

The way that the company car tax rate is ramping up at 2% each year on C02 emissions unless you are doing loads of miles - i.e. over 20k per year I wouldn't have thought it was worth getting a company car.......... however it is a fine line

It also depends what you are offered for a car allowance versus the cars you can get. If you do a fair bit of business mileage - i.e. 15000 and the alternative is only £450 a month (which is quite a derisory amount) then I would probably take the car on offer

Most companies will offer you circa £600 a month (suppose it depends on your role), then it becomes more of a trade off.

I would have the allowance usually and if I knew I was gonna do a fair few business miles then I'd by a several year old diesel as a Business runabout and have a Scoob as my weekend car

I wouldn't get a scoob as a company car as the C02 level and hence tax is too high (dont forget that the tax rates keep rising each year) Better to get a good diesel Turbo at a lower tax rate and then potentially get it chipped!! - and erm ''cough'' not tell the company you did it....''cough''.......

I had a fully expensed car for 3 years - and have been everywhere in France and the UK - thanks go to my previous company - the real perk is always the fuel card................I would drive to Scotland and it would'nt cost a penny (other than the sunk costs of my monthly tax bill) and I could use it abroad - i.e. my contract said fully expensed car.......so I just used my company credit card for the fuel.......... unless theres a clause in the contract forbidding it what can they do)

Tandy

[QUOTE=but you can sit in the outside lane at 80mph on a clear motorway and get away with it.[/QUOTE]

Spoken like a true BMW owner Now get in the inside lane if it's that clear...

Tandy

Baby Blue

[quote]If you get a car allowance you will usually be given circa 12p a mile for a diesel and about 10p a mile for a petrol.[\quote]

Actually Fangoria Revenue's own rates are:-

Petrol <1400cc 10p per mile
1000-2000cc 12p per mile
>2000cc 14p per mile

Diesel <2000cc 9p per mile
>2000cc 12p per mile

Agree that I (as a tax advisor) have never come across anyone lucky enough to get a car allowance & 40p per mile. Do regularly claim diff back on Tax Returns though.

[quote]you can ask to complete tax returns for upto 4 years in era's[\quote]

Pbee - you can usually only amend a Tax Return within 12 months of 31 January following end of UK tax year, i.e. y/e 05/04/03 must be amended by 31 January 2005. Only way around this is with an error or mistake claim. Fogetting to claim your additional mileage is not usually considered an error or mistake by the Revenue.

BB

Gubbins

Just my 2ps worth....

Similar position to Dazza - opted out of company car scheme - had Beemer 330ci co. car, went to STIPPP-TypeUK private car. All in, costs are about equal for private vs company in my situation - about 22K miles per year. The biggest hit is the depreciation, as I bought the car outright rather than leasing.

As for Dazza's comments on tax, costs, etc - spot on and in line with what the (large) company I work for pays. If you get 40ppm plus an allowance and no liability for benefit in kind, you're v.lucky, but your cash allowance is pretty low, so not that good!

Anyway, something else you need to consider...the new BMW engines will be Euro 4...which means no 3% surcharge. exhausts that point directly rearwards rather than pointing down.

In your situation....I'd take the company car, unless your prepared to seriously subsidise a scooby....

Diablo

Guys, I never said Dazza was wrong, but to say simply you don't get 40ppm is misleading.

Agreed most companies that pay a car allowance will only pay 12 (ish) ppm.

Some (like mine) do pay 40ppm for own car use regardless of whether or not you qualify for the allowance.

Saves having to claim it back. How hard is it to accept when you've been told it can and does occur?

It also appears that the original poster has been offered an allowance AND 40ppm.

Dazza's advice is on reclaiming the difference is fine, but of no relevance to Jza's original question.

D

Jza

Thanks for all your replies guys.

I did the calculation on the web site - to get the same car on PCP would cost me £36 a month MORE than having the company car....

I do claim and recieve £0.40 for the first 10000 miles and then £.25 thereafter.

Looks like ive got the choice - make a bit of mone by buying something cheap and economical (e.g. Mondeo TDCi 2 years old)....or spending a bit and driving a new car.

Just starting to travel 220 mile roundtrips.... can honestly say i think the luxury of the new comapny car + toys is sounding good.

Wish i got a company car 10 years ago when they cost so little!

Thanks!

Jza