Company cars

Jh664

Jh664

Jh664

Associate
Joined
20 Feb 2022
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3
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UK
Have been offered the choice between a company car and an allowance. The company car benefit I have been offered is a car to the value of £2800 per year.

I don’t have access to any lists of cars as yet but Any ideas what that could get me ? I’m new to company car/allowances so just trying to gain an idea of what I’m actually getting with that

Thanks!
 
Semple said:
I presume that would give you a monthly allowance of just over £200 a month, which isn't going to get you anything fancy.
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£280 inc. VAT if you are comparing to retail offers. Is that including maintenance (ie. a fully maintained lease cost)? Annual mileage? Type of car required for your work (if applicable)? Car allowance amount (per month and per mile)? Your tax status (basic/higher rate)? Sorry OP but the question is too open ended for anyone to really help.
 
Sorry - more details:
It will include maintenance covered by the scheme. No specific car type required just can’t be a two seater. Mileage will be circa 10k. Tax will be lower rate 20% at the moment.

I have the choice between a cash allowance at £3000 per year or a car from the company car scheme which will be using the corporate lease that states it can have a value of up to £2800 per year so was interested to know what sort of car I would be looking at for that price on the company scheme. Obviously companies get a discount on fleets of cars but is just looking at cars around the £230 mark per month on a lease site a good indicator?
 
Don't forget the company car attracts BIK too, so add that to any calculations you make to see if it's worth doing. Something like a Golf would be £1500 at 20% and £2700 on 40% rates. The allowance would just be taxed normally on PAYE.
 
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Take the company car if you are doing meaningful miles and need a newer car.

A fully maintained & insured car at that rate c£2.8k is likely to be focus, astra, fiesta level.

£3k car allowance after tax and ni deductions doesn't leave vast sums monthly.

Even with BIK considerations buying and running a car using the company car scheme is better value.
 
Scrutinize said:
Take the company car if you are doing meaningful miles and need a newer car.

A fully maintained & insured car at that rate c£2.8k is likely to be focus, astra, fiesta level.

£3k car allowance after tax and ni deductions doesn't leave vast sums monthly.

Even with BIK considerations buying and running a car using the company car scheme is better value.
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After tax and NI that works out at around £2000 for arguments sake but as Janesy said you need to allow for BIK. That could easily bump the difference back up to £3500 a year in real terms.

Personally I'd run my own car in those circumstances but everyone's situation is different.
 
lordrobs said:
After tax and NI that works out at around £2000 for arguments sake but as Janesy said you need to allow for BIK. That could easily bump the difference back up to £3500 a year in real terms.

Personally I'd run my own car in those circumstances but everyone's situation is different.
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Unlikely. The kind of car which comes in at £2,800 per annum lease isnt going to be £1500 of BIK.

As djjuk linked, that website is best for working out for a particular car whether you are better off private or with a company car.
 
really depends on what their offering for mileage as well,

previous employer we had iirc £4600 p.a. value of car or an allowance equivilant, difference came in your expenses claims if you had a company car it varied depending on vehicle engine size but was circa 11p/mile with your own car 2.0 engine would net you 45p/mile plus your monthly allowance. the 45p/mile for us was paid tax free. given I was nudging 30k p.a. it was a no brainer to run an older kuga and take the 45p/mile and monthly allowance given the car was bought and paid for
 
233 said:
really depends on what their offering for mileage as well,

previous employer we had iirc £4600 p.a. value of car or an allowance equivilant, difference came in your expenses claims if you had a company car it varied depending on vehicle engine size but was circa 11p/mile with your own car 2.0 engine would net you 45p/mile plus your monthly allowance. the 45p/mile for us was paid tax free. given I was nudging 30k p.a. it was a no brainer to run an older kuga and take the 45p/mile and monthly allowance given the car was bought and paid for
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That is also a valid point and worth considering in any calculation.

Dont forget to add the cost of business insurance if you go the route of your own car though and also watch out for any restrictions they put on age or size if you go with your own car. One place I worked insisted that you must have a 4 door and it must be no more than 5 years old if you chose not to take the company car as you were required to sometimes carry passengers.
 
Greebo said:
That is also a valid point and worth considering in any calculation.

Dont forget to add the cost of business insurance if you go the route of your own car though and also watch out for any restrictions they put on age or size if you go with your own car. One place I worked insisted that you must have a 4 door and it must be no more than 5 years old if you chose not to take the company car as you were required to sometimes carry passengers.
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speak with other colleagues and see how rigoursly they any restrictions, I worked at a multi billion pound organisation and despite the company car guidelines being less than 5 yr old they didnt give a snot as long as you did the job. one of the guys was quite happily rocking a 55 plate accord without any issue (given that you had to list the car make model and registration on our expenses portal its not like he was hiding it (neither was i was my own car. still allowance was paid every month and mileage was in the bank every week with out fail.
 
233 said:
really depends on what their offering for mileage as well,

previous employer we had iirc £4600 p.a. value of car or an allowance equivilant, difference came in your expenses claims if you had a company car it varied depending on vehicle engine size but was circa 11p/mile with your own car 2.0 engine would net you 45p/mile plus your monthly allowance. the 45p/mile for us was paid tax free. given I was nudging 30k p.a. it was a no brainer to run an older kuga and take the 45p/mile and monthly allowance given the car was bought and paid for
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Absolutely this. I've got a 1395cc Leon which annoyingly just scrapes into the lowest advisory fuel rate. What that means in real terms is that for every business mile I do it costs ME about 2p :mad:

Greebo said:
That is also a valid point and worth considering in any calculation.

Dont forget to add the cost of business insurance if you go the route of your own car though and also watch out for any restrictions they put on age or size if you go with your own car. One place I worked insisted that you must have a 4 door and it must be no more than 5 years old if you chose not to take the company car as you were required to sometimes carry passengers.
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This is part of the reason I really want to get my employer to agree to me running my own car. They had me running around in a 170k 9 year old Passat for a period of time (with the tax liability at about 6 times the value of the car...) so I'd start that conversation with "So, based on the Passat we know a 9 year old car is fine to use for work so is the age limit? 12 years old? Or maybe 15..."
 
Thanks for the tips guys - as far as I know the petrol is 11p per mile on the allowance and the same for if I take the company car.
EVs are probably not an option for me as I live in a flat with no charging point but I guess I could look at a plug in hybrid (albeit not sure I would find one at that price point).
 
I’d query that that’s not even enough to cover your fuel costs. Unless you in some hyper miling eco box

costs me approx £95 in fuel for 600 miles in a 520 diesel or approx 15p/ mile

accountsnts can this poor man claim back the running costs against tax or similar

either that op or ask work for a company car and a fuel card 11p mile unless you can find a car that will give a real world 65mpg in all conditions your going to be out of pocket for your work mileage
 
233 said:
I’d query that that’s not even enough to cover your fuel costs. Unless you in some hyper miling eco box

costs me approx £95 in fuel for 600 miles in a 520 diesel or approx 15p/ mile

accountsnts can this poor man claim back the running costs against tax or similar

either that op or ask work for a company car and a fuel card 11p mile unless you can find a car that will give a real world 65mpg in all conditions your going to be out of pocket for your work mileage
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Problem is that almost all employers just use the HMRC advisory rates and these are A) driven by manufacturers BS fuel economy figures and B) lag behind fuel price rises by up to 3 months.

Your best option if you have a company car and an expense account is to ask if you can put all your fuel through on your company credit card and then pay back private miles at the HMRC rate.

That's what the sales people at our company used to do but the person in charge of the support department at the time insisted he could make money on the fuel rates because his car was so efficient. So while the sales people whiz around not caring about their fuel economy all the support people were either hypermiling or, as was in my case, just paying the difference.
 
It stinks that HMRC are so slow are upping their rates but next review is 1st March so hopefully they will increase substantially

Petrol
Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Rate per mile Advisory fuel rate
Up to 1400 54.2 52.7 147.0 pence 668.0 pence 12.7 pence 13 pence
1401 to 2000 46.1 44.9 147.0 pence 668.0 pence 14.9 pence 15 pence
Over 2000 30.8 30.0 147.0 pence 668.0 pence 22.3 pence 22 pence
Diesel
Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Rate per mile Advisory fuel rate
Up to 1600 65.4 63.6 151.1 pence 686.9 pence 10.8 pence 11 pence
1601 to 2000 52.9 51.3 151.1 pence 686.9 pence 13.4 pence 13 pence
Over 2000 43.5 42.1 151.1 pence 686.9 pence 16.3 pence 16 pence

https://www.gov.uk/guidance/advisory-fuel-rates

Although to be fair the mopg they use for an over 2l petrol car of 30mpg isnt a silly mpg as they use the car manufacturers figures and knock 15% off for real world use. Its the £.147 per litre they are using for the price of petrol which is ruining the rates.
 
Greebo said:
It stinks that HMRC are so slow are upping their rates but next review is 1st March so hopefully they will increase substantially

Petrol
Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Rate per mile Advisory fuel rate
Up to 1400 54.2 52.7 147.0 pence 668.0 pence 12.7 pence 13 pence
1401 to 2000 46.1 44.9 147.0 pence 668.0 pence 14.9 pence 15 pence
Over 2000 30.8 30.0 147.0 pence 668.0 pence 22.3 pence 22 pence
Diesel
Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Rate per mile Advisory fuel rate
Up to 1600 65.4 63.6 151.1 pence 686.9 pence 10.8 pence 11 pence
1601 to 2000 52.9 51.3 151.1 pence 686.9 pence 13.4 pence 13 pence
Over 2000 43.5 42.1 151.1 pence 686.9 pence 16.3 pence 16 pence

https://www.gov.uk/guidance/advisory-fuel-rates

Although to be fair the mopg they use for an over 2l petrol car of 30mpg isnt a silly mpg as they use the car manufacturers figures and knock 15% off for real world use. Its the £.147 per litre they are using for the price of petrol which is ruining the rates.
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The over 2000cc petrol rate is the golden ticket because it is the catch all for every vehicle above and beyond that capacity so if you are driving, lets say, a Mazda 6 2.2 you've got all those driving around with monster V8/10/12 engines to thank for the mileage rate :D

I'm at the other end of the spectrum in a 1395cc Seat Leon Estate... with my rate being dragged down by Toyota Aygo's and other NA sub 1L city cars :mad:
 
lordrobs said:
The over 2000cc petrol rate is the golden ticket because it is the catch all for every vehicle above and beyond that capacity so if you are driving, lets say, a Mazda 6 2.2 you've got all those driving around with monster V8/10/12 engines to thank for the mileage rate :D

I'm at the other end of the spectrum in a 1395cc Seat Leon Estate... with my rate being dragged down by Toyota Aygo's and other NA sub 1L city cars :mad:
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Just another 6cc and you could have had another 2p per mile!

Its easy enough to buy a 2l+ petrol car which returns better than 30mpg (so long has you dont rag it)
 
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