Company car time

[Dolph]

https://www.gov.uk/calculate-tax-on-company-cars

You've got the tax piece wrong. Bik tax still depends on the value of the car and the amount of co2 it produces. The car allowance part provides a floor value for the lowest tax you can pay, but there are still clear benefits to lower emissions cars.

Have a play with the calculator on the hmrc site to get indication.

 

[Scrutinize]

I live in a city center and work 20 miles away which is the only reason I have a car. If I circumstances change I don't want to be left with car I don't need. In addition we're buying a house soon so I don't want the car as a debt for mortgage quotations. Along that I really can't be arsed with unexpected bills for a car. Rather take one of the mentioned cars and just drive it etc. I just want to make sure I get the best on of those cars so I'm asking you knowledgeable chaps and chapess

For a mortgage:

The loss of car allowance (salary reduction) and BIK costs will in effect both count towards reduced borrowing value.

E.g. a salary of £35k + CA £4k = £39k total salary for mortgage value multiplier purposes.

By taking a company car in this example your salary becomes £35k - BIK costs as these are a fixed deduction shown on your payslip which could in effect leave base salary of c£33.9k (assuming 20% tax rate on 118d SE @BIK £89 pm). If you are a 40% tax payer, granted your earning more but BIK doubles and I presume you would be on a higher CA so the salary loss can be significant.

Depending on the mortgage company, your initial salary value can make quite a difference to what you can borrow before loans/pcp etc etc are considered.

Some mortgage companies just make assumptions for cost of living and fuel etc like Halifax so taking your full salary and only deducting a lease cost or PCP etc will work more favourably if you need a higher multiplier.

 

[Mercenary Keyboard Warrior]

"Drivers choosing an Ultra Low Emission Vehicle (ULEV – cars emitting 75g/km CO2 or less) after 6 April 2017 will also be exempt from the tax changes."

So get an Ev or hybrid and you basically stay on the old scheme.

 

[Jimbeam3678]

Not 100% accurate as the Hybird I can order CT200h has a real world gpkm CO2 of 101 which would be above the threshold.

 

[Jimbeam3678]

For a mortgage:

The loss of car allowance (salary reduction) and BIK costs will in effect both count towards reduced borrowing value.

E.g. a salary of £35k + CA £4k = £39k total salary for mortgage value multiplier purposes.

By taking a company car in this example your salary becomes £35k - BIK costs as these are a fixed deduction shown on your payslip which could in effect leave base salary of c£33.9k (assuming 20% tax rate on 118d SE @BIK £89 pm). If you are a 40% tax payer, granted your earning more but BIK doubles and I presume you would be on a higher CA so the salary loss can be significant.

Depending on the mortgage company, your initial salary value can make quite a difference to what you can borrow before loans/pcp etc etc are considered.

Some mortgage companies just make assumptions for cost of living and fuel etc like Halifax so taking your full salary and only deducting a lease cost or PCP etc will work more favourably if you need a higher multiplier.

Thanks for the calculations I'll keep hold of them. However still not in the market for my own car for the other reason given. I've gone for the A3 which seemed like a solid choice and the reviews seem to put it above the BMW which surprised me.

 

[Cleisthenes]

The Astra is a top spec one so it'll have more toys than the equivalent german marque, if that's of interest.

 

[Mercenary Keyboard Warrior]

Not 100% accurate as the Hybird I can order CT200h has a real world gpkm CO2 of 101 which would be above the threshold.

yeah sorry I had meant to say plug in hybrid, they all iirc are closer to 50 than 100
I don't get the point in these hybrids now when the plug ins are also available

Cost though I suppose

 

[Dolph]

yeah sorry I had meant to say plug in hybrid, they all iirc are closer to 50 than 100
I don't get the point in these hybrids now when the plug ins are also available

Cost though I suppose

Plug in hybrids require somewhere to plug them in each night if you want to get the actual benefits from them (as opposed to just using the low book figure for reducing company car tax).

Not everyone has that (it's why I have a self charging hybrid not a plug in or ev) especially people who live in towns and cities where hybrids work best.

 

[Scrutinize]

Thanks for the calculations I'll keep hold of them. However still not in the market for my own car for the other reason given. I've gone for the A3 which seemed like a solid choice and the reviews seem to put it above the BMW which surprised me.

The 118d is a good performing and much quicker car than the A3 1.6TDI but then in SE spec it is a bit drab.

 

[Mercenary Keyboard Warrior]

Plug in hybrids require somewhere to plug them in each night if you want to get the actual benefits from them (as opposed to just using the low book figure for reducing company car tax).

Not everyone has that (it's why I have a self charging hybrid not a plug in or ev) especially people who live in towns and cities where hybrids work best.

Well maybe

We have for example installed plug in points at work

The plug in also charge as they go, ie they are just the same as a self charging but have the ability to plug in as well

Other than some minor electronics to convert mains to battery storage I am a bit bemused why they would not include this now as standard to all.
You don't have to plug it in, it will charge on the go, but you can plug it in when you have the opportunity.

 

[IAmATeaf]

I know you’ve already decided but if the car is just a work horse then I would have decided simply on current and future tax liability to ensure I handed over the least possible to the grabbing hands.

 

[Jimbeam3678]

Ok so plot twist it seems ordering a new car is nigh on impossible through my company due to the fall out of emissions scandal.

I’ve got 400 per month to spend on a car, tax and insurance. Would have to be a loan, no kids, 15 miles a year and claim my miles from company.

What are my options? And what are the most desireable options for for said car. Going round in circles looking at stuff. Looked at A3,1 series, seat leon and focus but keep going round in circles.

 

[Jimbeam3678]

Done some more thinking on this - I have £400 to spend on a car a month.

The car has to be a maximum of 5 years. Way I see it is I have 2 options either buy outright :-

13k loan at £380 a month over 3 years then fund the shortfall of insurance, tax and maintenance myself. At the end I have car worth X thousand whic his profit?
OR
Lease something like the below and have money in the pocket monthly but ultimately end up with nothing at the end. Also exposed if I ever lost my job/car allowance.
https://leasing.com/independent-brokers/neva-direct/seat/leon/324052870/

Sure this has been asked before but if someone could offer some advice I’d appreciate it as I can’t for the life of me work out the best option!