Company Car vs Car Allowance

You need to do the sums because the cost of a company car varies wildly depending on its list price and CO2 emissions.

It seems like you don't need another car so taking the cash (car allowance) seems like the best option from the info given.
 
As said got to do the sums.

Also remember that it's the car allowance value after tax plus the amount of CC tax/BIK or whatever it's called nowadays you would pay on the car chosen that is your total cost of having the car.
 
My girlfriend has the same decision to make in 6 months. We're leaning on the company car, just because that includes all the insurance as well (at least here). We're better off with a car allowance, but the hassle of repairs, insurance, etc just isn't worth if for the money she is on.
 
Thanks guys

One more daft question, as car allowance is included in your salary does the full amount need to be declared to hmrc?

Ie is my salary the amount before car allowance or after?

I'm guessing after as car allowance is taxable
 
I don't think car allowance is taxable is it?

I may be completely wrong though... My mileage allowance (different to car allowance) is paid on top of my salary and is not subject to taxation.

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With an accountable plan, the employer reimburses allowable business expenses. In this case, the reimbursement is not taxable and expenses are not deductible. Under a non-accountable plan, the payment may be a fixed amount per day or month with no documentation needed from the employee. The employer generally includes this on the W-2, and the taxpayer claims the business-use expenses of the car on Form 2106, according to IRS Publication 463.
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Seems that it depends. Best thing to do would be to ask your HR department how they do it. :)
 
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tom_e said:
After I think, which is why some go for the car as the allowance would push them over the higher tax band.
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This makes zero sense. You only pay the higher tax rate on the balance over the tax band. I.e. if you are £2k off the 40% tax band and you get a £6k allowance, you pay 20% on £2k and then 40% on £4k.

To the OP, take the amount they are offering you and add that to your gross salary. Go to a tax calculator website and compare with and without the car allowance included. This will be how much will go into your bank.

Compare this with the net cost they are telling you the car will cost under the car scheme after all of the car benefit taxes, NIC, etc.
 
for me:
£420pm if ordered via the company or (taxed via BiK)
£320pm in my salary (taxed via income tax)
45p per mile otherwise (untaxed as it's a reclaimed expense on monies already taxed)

Company cars must be 5 door. Management level is A4 or 3 series, so everyone else must choose something less "prestigious"....
Company pay for insurance as well as the car.

On paper the company car would be the better choice if I didn't care what I was driving. But I do so I'm still deciding on which option to take.
 
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I took the company car option and have it fully expensed.

The way I see it:

Anything goes wrong it is under warranty
Needs servicing, no problem send it in, pay with Credit Card and then expense the company.
Scrape the alloy? -1000 man points but who cares not my car!
Start seeing stone chips and slight marks on the car? Who cares not my car!
Needs a wash? Take it to the machine wash...swirl marks...who cares not my car!
Leave the company or possibly worse get made redundant...hand car back and no need to worry about the next pay check to pay for the loan/PCP payment on a private car usually paid for through an allowance.

Obviously there are many other opinions people may have but this car is the first company car I have had...and the least stressful to own!
 
You can calculate if you'd be better off having a company car vs buying privately. Back long ago I worked it out to being around £12k was the break point. BIK tax can really sting depending on which car you go for. It's a lot better these days though with super low-emission cars. No doubt there will be some calculators out there to do the comparison for you.
 
Basher said:
I just outline it on my tax return each year as income.

Remember, you can still claim mileage even when you receive a car allowance.
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I've got a company car and do a lot of miles every year. My company pay zero towards my mileage though (don't get me started on that). Apparently I can claim mileage thigh from the taxman - can someone point me in the right direction as to how to do this? I'm guessing I need to track my journeys etc?
 
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