Company car allowance advice req

cyber69

cyber69

cyber69

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I've just had a job offer which I cannot really refuse due to the current state of the economy but instead of usually offering a company car they have only given me the option of a car allowance of £4,100 per year (before tax I think). I don't currently own car and would need to purchase one but i'm thinking this figure does sound a little on the low side considering the job would involve a fair amount of travelling around (40,000 miles a year possibly).

Can anyone offer any advice here if I should try and push them for a company car or take the offer and buy and run my own car.
 
You could use it to get a personal lease, but the mileage will really sting the costs and hence what you can afford, especially if you are then expected to pay the maintainance and service items, ie a non maintained lease.

What type of company car would you expect with the role? Usual A4 TDi repmobile?

What mileage allowance do you get for fuel? If you take the allowance for your own car I guess you can then take the usually higher personal mileage business rates for the fuel expense rather than company car user rates.
 
The agency told me between 14p and 16p per mile which sounds low too. I think they know as I am desperate for a job that they can offer me this low amount. The usual company cars they offered where basic Vectra type diesels and Astra estate base models.
 
The following might help you understand what the allowances are based on from the government: http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm (linked from http://www.hmrc.gov.uk/rates/travel.htm).

So it seems 14p to 16p is correct for fuel, however that only applys to fueling company cars and the link in brackets is the total allowance if using your own vehicle in order to cover the increased business insurance costs etc you would incur using your own car rather than a company car.
 
The guy in the agency then was quoting mileage for a company car when he was telling me I would only get an allowance. Sounds like he got his figures wrong.

So if I ran my own car then I can claim 45p for the first 10,000 business miles in a tax year, then 25p for each subsequent mile.

So £4100 plus if I do 40,000 miles in a year = 45p * 10,000 + 25p * 30,000 = £16,100 per year to pay for fuel, tax, servicing and the car itself.

Minus say 12p per mile for actual fuel costs on a diesel over 40,000 miles = £4800.00 per year

Which leaves me with £11,300 ish per year for everything?

Does getting a car allowance mean I can only claim 14 to 16p per mile or is that not classed as a company car?

Sorry for my ignorance
 
cyber69 said:
Does getting a car allowance mean I can only claim 14 to 16p per mile or is that not classed as a company car?

Sorry for my ignorance
Click to expand...

generally yes, you then claim tax relief on the difference between that and the 45p/25p rate


I get 5544 a year and 18p a mile

I then claim tax relief on the difference

first 10k miles 45-18 * 40% = 10.8p a mile ( half that if 20% tax payer ) after 10k it works out at 2.8p a mile
 
Their way of calculting this doesn't make any sense... why claim you can get 40p/mile when in reality you only get 8p/mile if you're a 20% tax payer?

So supposedly you can claim up to the 40/45p/mile limit...

If your company pays 25p and you claim the other "15"p back from the tax man... in reality you only get 28p/mile (if 20% payer)... not 40

However, if your company pays 40p/mile... you get 40p/mile with no extra tax liability.
 
[TW]Fox;19080059 said:
Why do you only get 28p a mile?

It's tax free?
Click to expand...

Because the other 15p isn't paid to you... it's offset against the tax you pay.

So... if you're offsetting the 15p against your tax and you're a 20% tax payer... then you actually only see 3p

As in... it's 15p you don't pay tax on... so that's 12p you would have been paid anyway & 3p that would have gone towards tax that's now going in to your pocket... thus you're only 3p better off
 
the figire for tax relief on first 10k is now 45p

so if you get 25p you would get 29p with tax relief if 20% tax payer
 
Appreciate the replies. I'm not sure what kind of car i'm going to be able to afford with just a £4,100 allowance a year.

Would this be something that would put you off taking this job or do you think I don't have much option considering the amount of jobs out there?

I've been putting money aside for the last 18 months knowing that I may have to buy a car because of changing my job but I don't want to run it into the ground without being recompensed properly.
 
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