Company Car Allowance
- Thread starter Scrutinize
- Start date
I am young and do loads of miles, its still not worth it.
[TW]Fox;11610183 said:Allowance is an excellent idea and means you can buy a good car rather than have your company ruin your interest in cars by providing you with a crappy Golf or Passat diesel thus removing any justification you had for owning your own car
But if you dont have a Passat you be a failure
If your business miles are high then its better to get a company car imo.
a lot of companies are switching to different schemes now, ours is a car ownership scheme, so the car is actually yours (your given a tax free loan to buy the car and have make a contribution).This why i can drive the car i have without being nailed on cc tax.
I do 30k a year at the mo, 15k personal (inc commute) and 15k business,so it makes sense for me to have a car provided by work.£500 ppm wouldnt really get me a decent car tbh, as ours has to be 4 years old and less than 100k miles on the odometer.i have done 50k a year before, that kind of mileage would kill the value of any personally owned car.
Soldato
If you read the terms it'll probably stipulate a single place of work.
If you take a company car, be fully aware of the tax implications.
You're going to get taxed a fixed percentage value of the car every year: not the discounted price you may have negotiated with the dealer, the full whack. On top of what you already pay.
If you get fuel allowance, HMRC will view that as additional income and tax you again. To the tune of something pretty obnoxious (judged as an extra £3000 of income, give or take), regardless of how much the company actually pays for.
If you take the allowance, it simply gets taxed as normal income and - as such - you can spend it on whatever you want. You just won't get very much back for mileage. If anything at all.
Company car tax = the suck, whichever way the cookie crumbles.
You're going to get taxed a fixed percentage value of the car every year: not the discounted price you may have negotiated with the dealer, the full whack. On top of what you already pay.
If you get fuel allowance, HMRC will view that as additional income and tax you again. To the tune of something pretty obnoxious (judged as an extra £3000 of income, give or take), regardless of how much the company actually pays for.
If you take the allowance, it simply gets taxed as normal income and - as such - you can spend it on whatever you want. You just won't get very much back for mileage. If anything at all.
Company car tax = the suck, whichever way the cookie crumbles.
Many people, when they take an allowance, generally go for a PCP scheme so you dont really get any discounts from a dealer.You have to bear in mind, if you are doing a lot of mileage, any car you buy privately will lose a lot of money.
If you are talking about Fuel Cards, then you have to weigh up if your private mileage warrants you taking a fuel card,i have devised a little spreadsheet, which tells me what my break even point is in terms of mileage, it takes into account the car's mpg, and current cost of fuel, for me its 7.5k miles, i pay a revised £90 a month for my card.
Again it depends on the car and mileage in reality.
Soldato
Quite simple. They phone your employer and ask if you were working when you had the accident!
If you have commuting on your policy then it usually states "commuting to/from a fixed place of work" which coveres them against what you suggested.
Soldato
I've been getting a car allowance for the last 3 years of just over 5k and so far I've not spent a bean of it on a car I'm still driving the same wreck as when I started. Financially it just made load more sense to me I don't do mega miles but am expected to travel at the drop of a hat I still get 18ppm when on company business and because my car is tiny and efficient even that returns a nice profit.
- Joined
- 4 Apr 2003
- Posts
- 8,057
Just checked my policy with Churchill and it automatically covers business use as long as your not in the motor trade, sportsman etc etc. So thats good.
I think I will take the allowance then and stick with the Astra. I have done the sums and although close, the allowance should work out better.
On a side note, I am £25pm better off with the new 20% tax system
It all helps.
I think I will take the allowance then and stick with the Astra. I have done the sums and although close, the allowance should work out better.
On a side note, I am £25pm better off with the new 20% tax system
It all helps.
Associate
If your employer is only paying 18p per mile for business use, you can claim the balance from HMRC - up to 10,000 miles = 40p, 25p per mile thereafter.
It is given as a tax relief (at your highest rate) rather than actual "cash" like from your employer.
Example :
You do 10,000 business miles and pay tax at 40%. Tax Refund = £880.00 (40p-18p x 10,000 @40%).
You can claim for previous 5 years, if appropriate.
Soldato
I found that when i took my old job that i opted for the company car.
i MAY have saved money by getting the allowance (wasnt an option anyway, but...) i found the hassle-free life it gave me was worth the loss(?) in money.
Needed tyres? phone the fleet. Needed a service? phone the fleet. Had an accident? yep, the call fleet people and i had a courtesy car the same day (with no impications on any insurance).
I also opted for a fuel card, not for financial reasons, but for ease. I ended up doing a LOT of private mileage, so it was worth it.
as a rough, rough guide the car, and fuel card cost me around £190/month. I think thats pretty fair considering i incurred no other runnng costs...
Shame i couldnt use the fuel card on my V-Twin bike, got 17mpg yesterday :/
i MAY have saved money by getting the allowance (wasnt an option anyway, but...) i found the hassle-free life it gave me was worth the loss(?) in money.
Needed tyres? phone the fleet. Needed a service? phone the fleet. Had an accident? yep, the call fleet people and i had a courtesy car the same day (with no impications on any insurance).
I also opted for a fuel card, not for financial reasons, but for ease. I ended up doing a LOT of private mileage, so it was worth it.
as a rough, rough guide the car, and fuel card cost me around £190/month. I think thats pretty fair considering i incurred no other runnng costs...
Shame i couldnt use the fuel card on my V-Twin bike, got 17mpg yesterday :/
Personally I preferred the company car over the allowance. When I compared the total costs, there wasn't much in it either way, but I was persuaded by a couple of things.
Firstly, the company car was insured by the company and the lease included all maintenance, so the only cost to myself was the added tax hit. I doesn't matter what goes wrong with the car, I never have to pay more than that. What if you take the allowance, then buy a car and have some serious malfunction with it? Potentially there could be large repair costs, and certainly you will have depreciation costs. I have the car for 2 years then I get a new one for the next two - the amount I pay in extra tax wouldn't even cover the depreciation on most cars.
The other thing that I saw as a great advantage is that everything is taken care of for me. I don't have to bother hunting for insurance quotes, breakdown cover quotes, any of that stuff. Plus, if I have any problems with the car at all, from a puncture to a complete write-off, I just call the nice lady in our office and she sorts everything out. I'll have an AA man or a replacement car or whatever I need without having to get off my arse.
Company cars are a fixed-cost (except for personal mileage), no hassle way of having a car. Everyone at my company has one except for one guy, who is currently barred from the scheme because one of the directors is trying to get him fired. You can tell which is his because it's the only one in the car park thats more than 2 years old, and occasionally has bits broken or hanging off.
Firstly, the company car was insured by the company and the lease included all maintenance, so the only cost to myself was the added tax hit. I doesn't matter what goes wrong with the car, I never have to pay more than that. What if you take the allowance, then buy a car and have some serious malfunction with it? Potentially there could be large repair costs, and certainly you will have depreciation costs. I have the car for 2 years then I get a new one for the next two - the amount I pay in extra tax wouldn't even cover the depreciation on most cars.
The other thing that I saw as a great advantage is that everything is taken care of for me. I don't have to bother hunting for insurance quotes, breakdown cover quotes, any of that stuff. Plus, if I have any problems with the car at all, from a puncture to a complete write-off, I just call the nice lady in our office and she sorts everything out. I'll have an AA man or a replacement car or whatever I need without having to get off my arse.
Company cars are a fixed-cost (except for personal mileage), no hassle way of having a car. Everyone at my company has one except for one guy, who is currently barred from the scheme because one of the directors is trying to get him fired. You can tell which is his because it's the only one in the car park thats more than 2 years old, and occasionally has bits broken or hanging off.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
- Joined
- 4 Apr 2003
- Posts
- 8,057
After looking at the figures, if I didn't already have a decent car then taking the company car is much better than buying one. I don't expect to be doing huge company mileage either. Even allowing for 1k of servicing costs per year the allowance is marginally better. Not to mention the salary boost which will come in handy for a mortgage application.
[TW]Fox;11613146 said:
Agreed
If I was being offered a 3 series or something then I would probably sell mine and take the company car. However I am not expecting anything over a family hatch diesel.
[TW]Fox;11613146 said:
Who cares? I don't know quite why you're placing so much emphasis on the 'enjoyment' of a car. I'm not a high-up and I didn't have a great selection of car. I had an A3 before I switched to a 1-series BMW. Neither is exactly a spectacular car, but who gives a damn when I'm cruising at 70-80 (or 0, more often), or crawling through a city at 30? Britain's roads during business hours are boring places whether you're in a Fiesta or a Zonda.
It's a tool for doing work, if I want to have fun I nail my girlfriend.
Last edited:
Becuase this is a motoring forum and we like cars? If the people in here thought a car was just a tool why do you think we'd all post here.
But driving to your girlfriends in a nice car, then nailing her, is even more fun!
It wouldn't bother me - depreciation is not a concern for me becuase the cost of ownership I calculated factored in a residual value of zero. Increased running costs would be funded by the mileage allowance the company car allowance. Running a 5 year old used car does not cost more than leasing a brand new car.
In the first year I had the car I did do nearly 20k (Much to my suprise, I wasnt expecting to) and it coped just fine. A lot of this was business mileage with no allowance beyond a 53p a mile expense rate and it covered the additional wear and allowed me to invest in a shiney set of wheels at the end.
As for your mates A3 - well, a car will reflect the care you put into it. Most people dont care about company cars so they get battered. The original owner of my car did 35k business miles a year in it - it was his own car - and it was absolutely immaculate despite this.
Soldato
I agreee entirly with Scottly, it is so dependant on the projected mileage and the costs of maintaing and depreciation.
I've bene given a 407 1.6 HDI SE, not exactly great but then the company is picking up all the bills for it. I do on avergae 30K a year. The allowance we get instead of the car would not pay for me to own a decent car which would have any value left in it after running it for 1-2 years. To spend the 20K on a car and it be worth nothing after 2 years and having then had to insure, tax service, buy tyres etc just would make no sense.
I've bene given a 407 1.6 HDI SE, not exactly great but then the company is picking up all the bills for it. I do on avergae 30K a year. The allowance we get instead of the car would not pay for me to own a decent car which would have any value left in it after running it for 1-2 years. To spend the 20K on a car and it be worth nothing after 2 years and having then had to insure, tax service, buy tyres etc just would make no sense.