BlueSimon

Hi Guys,

have any of you move from a company car to a private car? - did you get an 'incentive' from your company and what was it.

Currently i run a company owned 03 WRX PPP (buy price about 22k with all the bits) and i want to move to a 05 STI PPP but the Company TAX is prohibative because of the emissions (same for the 350Z im also looking at)

any feedback would be appreciated

Simon

Scott W

How many miles a year do you cover? Are you paying for the fuel as well?

I took the option of running my own Scooby (with a fuel card provided by the company and monthly payment from them towards the cost of the ownership) and I seriously wish I hadn't (and hence me now driving a ST220 for work). The replacement tyres every 10k-15k cost me a small fortune, and as my Scooby is a MY00 I had to have it serviced every 7.5k miles. This, along with the insurance for business travel, etc.. made the cost of running the car very expensive. (I was doing over 30k a year in it)

I'm just glad the company were picking up the fuel bill!!!!

SPIKE LIKE MIKE

i opted out,or was chucked out after losing my license for dd,opted for a 330ci and charged mileage 40p per mile,might just of broke even,but i do about 10-13k a year but charge the company twice that to get anywhere near,the scoob is even worse i charge the same but after the first 10k you can only charge 25p a mile therefore upping the need for creative mileage,you can of course charge what you want a mile but will get taxed for every penny above the 40 and 25p reccomended.

in all honesty if you have a scoob as a co car youll be streets ahead all the time,stick with the system its about the only time it works especially if you get your private mileage paid for

GrollySTI

Just a fews sums that may help.I think they are right but I'm no accountant.

Taxable benefit of WRX+PPP is about £8000.If you are a higher rate tax payer that's about £3200 a year cost - assuming 35% emissions.

If the company is giving you cash instead (say £7000) then that adds about £4200 to your salary (net)

Thats an increase in your net salary of £7400 a year or approx £620 a month.

Fuel will depend on the amount of business mileage you can claim and how much private mileage you do ie home to work.

You end up owning the car (assumung you dont lease) which has some value also.

Hope this helps.

BlueSimon

Thanks very much for these replys

I do about 20k a year of which 1% is business miles, but i still get the petrol paid for

To me i think i would need to be paid (take home) about £900 a month more to get the equivalent benifit <boss faints>

lets see how far i can push

Simon

Rewolf

I opted out of the company scheme, taking the cash option and went from a Mondeo ST200 to Impreza 04 WRX PPP. The Car scheme was that you got a cash allowance that you could use for paying a lease (including insurance) and company car tax to just taking as cash which is taxed as normal (higher rate). Mileage allowance remains the same at measily 13ppm, with all petrol purchased by self.

So what happened? Take home pay up by £500/month. Had to take out loan to buy car - repayment £330/month, insurance £690/year or about £60/month, car tax £160 or £14/month. Servicing - no charge as caught the 3 years free servicing. Still on first set of tyres. So in year 1 income = £6000, outgoings = £4810.

However depreciation is about £9K over 3 years (gulp) so outgoings are really £7800, but (although I haven't tried it yet - will get advice), Tax rules allow 40ppm for mileage, and allow claiming back of tax on the difference, so with 9000 business miles I can get back 40% of 9000 x 27p which is £972, and because I try not to risk my licence when I am being paid to dawdle along at 70, I am making £5 per tank (340 miles - yes really) so can also add in £5 x (9000/340) which is £132.

So just on the boring money side I am down £700 per year. But had I leased the same car it would have cost £690/month for lease and insurance plus £260/month in company car tax which is a much worst position. They wouldn't have been keen on PPP either and I would have had to pay for it myself. Otherwise the lease/insurance costs had rocketed such that what I paid for the ST200 would have got a Vectra 2.0.

But it is not all about the money, otherwise I would have got a diesel rep car, and I could have saved on depreciation by not buying new, not adding PPP, quickshift, CD changer etc. If you compair this to someone that doesn't get Company Car allowance I am paying £700 per year to drive a 265 bhp Impreza! This last statement is not true because I have to pay for private petrol use, but the £700 covers the purchase and non mileage related costs. I have no regrets about the change at all, and I have much more fun.

7 Foot

My arrangement with my last company was that I would take home an extra £300 per month which I could use to buy a car.

I then claimed 40p per mile for the first 10k miles (annual) and 25p for every mile after the 10k ceiling.

BlueSimon

Great Feedback Rewolf, 7 Foot Just what i wanted

Simon

7 Foot

http://www.inlandrevenue.gov.uk/rates/mileage.htm

May be of some use. Point 8 illusrates my tax free mileage allowance.

DPat

Could have an M3 CSL, but take the cash instead (15k less 40%) and run a JDM STI8 moded how I want it

I think I'm quids in and get to drive the car of my choice (only allowed BMers and other 'nice' cars)

DPat

7 Foot

Eh????

bluepolarbear

The 40p rate is only applicable for your first 10,000 miles then it drops to 20 something.

If your company is not paying 40p you can claim the difference from the tax man.

13p a mile - I get 12p


Mine's a company STI - obviously it depends on how much money you get from opting out and how many miles a year you do but if you can get a scooby on the company I'd be surprised if you can do anything but breakeven at best by opting out.

ThrustSSC

Without going into the maths here, I got "into profit" on my STi by running it for 5 years. When you don't have anything like as much depreciation for the last two, plus you're still taking the allowance, it's a winner

Rewolf

So I can claim back the mileage rate difference then!

But that means filling in those bloody awful tax return forms again

Rioja

True enough, the car allowance is taxed at source; in your salary. However, the fuel card you obtain will be taxed on your P11D as a 'benefit in kind'. You can off-set any business miles against this and get a tax refund at the PPM rate on the tax website. the important thing to do, unless you want a huge tax bill at the end of the year! (if your not doing many business miles) is to estimate how much you will spend on the fuel card during the tax year (April - March), £2000 for example, phone the tax office and reduce voluntarily reduce you tax code by that amount, ie 413L to 213L. This will spread the cost over the year and come P11D time you will not be short.

speedking

You may get away with completing a form P87 rather than a full tax return

Rewolf

Now that looks a lot more appealing! The fuel card issue doesn't apply to me because I don't have a fuel card - I pay for all the petrol up front, and have to claim the mileage back after the event - if I get it right, then the money appears before the credit card bill needs paying, if not (the usual scenario) then I am a few hundred pounds out of pocket.

zappa

Obviously the running of a company car has financial implications for both employer and employee. If you can demonstrate the aggregate saving you could then negotiate a salary increase which:

a) gives you ALL the saving by way of salary increase

b) shares the saving between employer and employee (more likely)

Obviously you need to be sure that it will be cheaper to run a private car as opposed to a company car.

My business has a piece of software designed specifically to answer this question (obviously for a small fee!!)

PM me if you are interested