Associate
How do they generally work?
just curious really.
just curious really.
Car Allowances
- Thread starter ruffneck
- Start date
Don
You get money, you pay income tax on it at the rate for which band you are in.
Just treat it as extra salary that is there to be spent on a car.
Just treat it as extra salary that is there to be spent on a car.
right, and this can be any car? what about leasing?
Don
Depends on what the rules are for your company. All are different.
In my last company, there were the following rules.
Car must represent the position in which you are in (No Fiestas for senior management)
Car must seat 4 or more people
They put these in to stop people doing bangernomics with their car allowences.
Many people lease cars using their car alloence, or do PcPs. I tend to favor the PcP but be careful with PcPs over £25k as they are unregulated and many don't allow you to do voulentary termination (despite what the dealer will tell you)
In my last company, there were the following rules.
Car must represent the position in which you are in (No Fiestas for senior management)
Car must seat 4 or more people
They put these in to stop people doing bangernomics with their car allowences.
Many people lease cars using their car alloence, or do PcPs. I tend to favor the PcP but be careful with PcPs over £25k as they are unregulated and many don't allow you to do voulentary termination (despite what the dealer will tell you)
right ok.
Thank you
Thank you
Don
did that mean no e38's for the lowest staff?
Essentially, yes.
There was an unspoken rule that no member of staff was allowed to have a car that was faster or more expensive than the directors.
It wasn't hard though as they all drove some serious metal.
Don
If you did it without asking, you'd probably be told to sell it.
I never fell foul of this rule though as a Lexus GS430 or Audi A8 were no where near special enough for them to raise an eyebrow.
I never fell foul of this rule though as a Lexus GS430 or Audi A8 were no where near special enough for them to raise an eyebrow.
Associate
I get no car allowance yet I still have a better car than all the managers and and directors at my company, there are 550 people currently working on our site and I am lucky enough to have the best car even tho I am just a regular none management worker.
I here there are some redudencies coming up soon so I had better hide my car at the far end of the car park for the time being
I here there are some redudencies coming up soon so I had better hide my car at the far end of the car park for the time being
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Associate
Bought it, paid 1/3 from money I had and made the rest up with a bank loan.
As you know I wrote off the first one and this was actually paid for by the insurance pay out.
As you know I wrote off the first one and this was actually paid for by the insurance pay out.
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Soldato
it varies too much by company to say specifically. Some offer the opportunity to buy your own, others say you have to have a car through their scheme, but with lots of flexibility. Further, others have a VERY strict criteria to follow, even only having one/two choices on their list.
The days of it being a perk are gone really, though its its still cheaper than running your own car, you do invariably have less of a choice.
If you have the car through a companies policy, you generally have an allowance to spend, say £400 a month (which the company pay all of) and then you pay tax based on the purchase price of the car, and its CO2 emissions. The allowance can sometimes be topped up, but you're liable for this for the duration of the car. If you spend less than the £400 allowance you get it back in cash in your salary, which gets taxed. If you can buy your own car with a cash allowance, you generally get more, but get taxed on it, and have to pay servicing and maintenance costs out of that. With a "fleet" car all of this is paid for by the company (tyres, the lot). PCP schemes can incorporate this into the agreement, but then you normally can only do PCP on new cars, and so the budget doesnt go as far.
As an example of how that translates into money, in my job we have to use the companies scheme (HSBC) but can have a VERY wide selection of cars. On the higher tax band you pay 40% company car tax on the emissions. I was going to have a Focus ST, but as the emissions were so high, and with the higher tax band meant the company would be paying the £400 (fine) but my wage would be:
Salary minus:
- income tax
- NI
- car tax
- fuel tax (i choose to have a private fuel paid for too - i pay extra in tax for the "privilige").
For a Focus ST (Petrol, turbo) the fuel and car tax bill each month was ~£430. Which basically means unless you are earning WELL over the threshold you have to have diesel (for any kind of performance). My Alfa 159 TDi for example costs me ~£200 a month
The days of it being a perk are gone really, though its its still cheaper than running your own car, you do invariably have less of a choice.
If you have the car through a companies policy, you generally have an allowance to spend, say £400 a month (which the company pay all of) and then you pay tax based on the purchase price of the car, and its CO2 emissions. The allowance can sometimes be topped up, but you're liable for this for the duration of the car. If you spend less than the £400 allowance you get it back in cash in your salary, which gets taxed. If you can buy your own car with a cash allowance, you generally get more, but get taxed on it, and have to pay servicing and maintenance costs out of that. With a "fleet" car all of this is paid for by the company (tyres, the lot). PCP schemes can incorporate this into the agreement, but then you normally can only do PCP on new cars, and so the budget doesnt go as far.
As an example of how that translates into money, in my job we have to use the companies scheme (HSBC) but can have a VERY wide selection of cars. On the higher tax band you pay 40% company car tax on the emissions. I was going to have a Focus ST, but as the emissions were so high, and with the higher tax band meant the company would be paying the £400 (fine) but my wage would be:
Salary minus:
- income tax
- NI
- car tax
- fuel tax (i choose to have a private fuel paid for too - i pay extra in tax for the "privilige").
For a Focus ST (Petrol, turbo) the fuel and car tax bill each month was ~£430. Which basically means unless you are earning WELL over the threshold you have to have diesel (for any kind of performance). My Alfa 159 TDi for example costs me ~£200 a month
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Pug, those cars do not cost you those figures at all assuming there is a cash alternative available. You must also take into account the fact that you are forgoing the additional cash and add the net of that to your figure.
I cannot see how company cars are not a total waste of money if you get free choice of private car. I did the company car thing for three years, i have been through the figures for all vehicles a thousand times. It doesn't make sense to me.
I cannot see how company cars are not a total waste of money if you get free choice of private car. I did the company car thing for three years, i have been through the figures for all vehicles a thousand times. It doesn't make sense to me.
I've always had car allowances, most companies i've worked for just give you a set amount (which is subject to tax ofc) and you can do what you like with it.
We've never had any restrictions on what you can get. Then depending on what you get, and how much private mileage you do its then a choice between the fuel card, or claiming back fuel costs per mile (usually 40p for the first 10k, and then 25p after), bascially if the car is costing you less than 25p/mile to keep moving, and you don't do much personal mileage then claiming the fuel costs back is going to net you more income too.
We've never had any restrictions on what you can get. Then depending on what you get, and how much private mileage you do its then a choice between the fuel card, or claiming back fuel costs per mile (usually 40p for the first 10k, and then 25p after), bascially if the car is costing you less than 25p/mile to keep moving, and you don't do much personal mileage then claiming the fuel costs back is going to net you more income too.
Even doing a fair bit of personal and driving a V8 heavy car i still break even at the very least on fuel. And thats at 21ppm. People jump at fuel cards with little thought to whether they are worth it, its much the same as the situation with the cars themselves.