Car Allowance

[Evo8]

Yeah, I'm sure it's 45ppm for the first 10k miles then it drops to 10ppm or something after that.

 

[[TW]Fox]

Oh you can.

So if said person gets £350 a month, but they have a car which is worth £10k, but due to doing 10-15k business mileage could lower the resale value of the car over a 2 year period, then the extra cost in tyres, brakes, extra servicing, and so on... It is easy to lose money on it.

You're saying it costs more than £350 a month excluding fuel in additional marginal cost to put an extra 15k miles a year on a £10k car?

 

[Kenai]

The only way I can see you would 'lose money' via an allowance is the situation Rotty describes where taking the allowance means receiving a pitiful mileage rate vs getting 45p per mile for using a private car, though even then it would need to be a good number of business only miles or a really crap mileage rate for that balance to tip, by the time you allow tax rebates for the lower rate etc.

 

[Basher]

My basic is just under the 40% tax limit, but any extra screws me into the 40% rate. Which is why a car allowance is a bad move for me.

That makes no sense. You'd only pay 40% on the bits over the threshold that you earn, so you wouldn't be worse off

I currently get £600 per month and 45ppm

 

[Hxc]

Yes, but technically with bonus and commission I'm bumped into 40% already.

That... doesn't make any sense. You can't lose money by taking more.

 

[delta0]

Include NI and you are actually looking at 32% vs 42%. As mentioned this extra is only paid on the amount above the threshold. Tax is tiered.