Company car and tax - worth it anymore?
Discussion
Just been looking at the company car tax tables for the next few years and it's getting ridiculous.
Even a Zero emission car will be taxed at stupid amounts come 2019.
Mines up soon. Definitely going to opt out and take the cash.
I've worked out that even a basic Audi A4 2.0tdi will be around £250 a month in tax come 2019 for a 40% tax payer. That's just mental.
Even a Zero emission car will be taxed at stupid amounts come 2019.
Mines up soon. Definitely going to opt out and take the cash.
I've worked out that even a basic Audi A4 2.0tdi will be around £250 a month in tax come 2019 for a 40% tax payer. That's just mental.
Anything with a decent size petrol engine has been £££ for years.
Unless you are doing 25K miles a year or more and happy to drive a small diesel engine or hybrid repo mobile, then Id just take the money
www.comcar.co.uk is good to compare real cost out of your salary
Unless you are doing 25K miles a year or more and happy to drive a small diesel engine or hybrid repo mobile, then Id just take the money
www.comcar.co.uk is good to compare real cost out of your salary
It purely depends on individual circumstances. For many people a company car is still a brilliant deal. It is for me with my particular circumstances. For others, it isn't. A big factor is often insurance costs on covering your own car.
The other benefit of a company car is that it's a fixed monthly cost you can plan for over 3 yrs. Running your own car is never like that.
The other benefit of a company car is that it's a fixed monthly cost you can plan for over 3 yrs. Running your own car is never like that.
I agree, in years gone by I've taken the car as it's been a no brainer, but now I've seen the BIK rates for the forthcoming few years it's getting ridiculous.
When they went onto omission based rates in 2003, they said it was all about reducing the CO2's in the world. So how can they warrant a 16% of list price on a ZERO omission car?
Have a look.....for a 40% tax rate payer, in 2019, a crappy £22k Nissan leaf is going to cost £118 a month in tax alone! If you have a cash alternative of say £400/mth, you are net £518 worse off a month. Yes the £400 is gross as there's tax to consider, but then there is tax relief for using your own car so you can balance this out easily to make the £400 a net figure.
Same scenario, but with a bog standard BMW 318d and it's a net cost of £689/mth or £8,268 a year!!
It's only going to get worse and worse after 2019/20....crazy.
When they went onto omission based rates in 2003, they said it was all about reducing the CO2's in the world. So how can they warrant a 16% of list price on a ZERO omission car?
Have a look.....for a 40% tax rate payer, in 2019, a crappy £22k Nissan leaf is going to cost £118 a month in tax alone! If you have a cash alternative of say £400/mth, you are net £518 worse off a month. Yes the £400 is gross as there's tax to consider, but then there is tax relief for using your own car so you can balance this out easily to make the £400 a net figure.
Same scenario, but with a bog standard BMW 318d and it's a net cost of £689/mth or £8,268 a year!!
It's only going to get worse and worse after 2019/20....crazy.
audi321 said:
but then there is tax relief for using your own car so you can balance this out easily to make the £400 a net figure.
Only if you do the business miles. If you have a company car allowance, and use your car for private miles, you dont get any tax relief, unless Im wrong? And equally, someone with a company car, but adding their own fuel, gets the same tax relief. Company car isnt an easy one, but take 2 guys at work last year. 1 company car, 1 not. Lad with the c/c had his clutch go one night at 7pm. By 10am next morning he had a new car, and his was returned a week later fixed and cleaned. Other lad had his alternator go while in France. Think the total bill was about 2k, and his holiday was messed up because on a Sunday nowhere in France is open. Added to that the £400 of tyres he goes through, £100 on servicing, £600 on insurance etc and suddenly the numbers dont look so simple.
FWIW I worked out, for my car, the difference between company car and not was the cost of the repairs. So if no work needed then the 2 are about the same. If I need to start fixing things that is when the CC is cheaper. There is also the intangible benefit of getting to drive a car which I chose and is mine to change and modify to suit. Over time, as depreciation gets less per year, it should work out cheaper - but by that time it'll probably be time to replace. The real winners are the guys running 15 year old sheds and getting £500 a month for the privilege.
Condi said:
The real winners are the guys running 15 year old sheds and getting £500 a month for the privilege.
I'm one them.The lucky part is working for a company that doesn't have any maximum age stipulations on what car you drive, many do.
But running a shed does mean you need to be hands on and invest some of your time keeping it going. If you had to rely on putting your car into a garage for everything little thing then it is a nope.
Condi said:
audi321 said:
but then there is tax relief for using your own car so you can balance this out easily to make the £400 a net figure.
Only if you do the business miles. If you have a company car allowance, and use your car for private miles, you dont get any tax relief, unless Im wrong? audi321 said:
Correct, but I don't really know anyone who gets a company car that doesn't do at least some business mileage?
We used to be offered company car or cash alternative at my old place (big retailer) as it was considered a perk expected in line with certain pay grades even if you never left head office. They changed it 18 months so that everyone was moved onto the cash allowance unless you were a store manager.Condi said:
Only if you do the business miles. If you have a company car allowance, and use your car for private miles, you dont get any tax relief, unless Im wrong? And equally, someone with a company car, but adding their own fuel, gets the same tax relief.
No tax relief on either.If you have a company car and you pay your own private miles, no tax relief. If they pay your private miles, you get a further tax hit.
If you run your own car and the firm pays you the HMRC rate of 45/25p, then no tax relief. If they pay you less than that, you can claim the tax back on the difference.
eltawater said:
We used to be offered company car or cash alternative at my old place (big retailer) as it was considered a perk expected in line with certain pay grades even if you never left head office. They changed it 18 months so that everyone was moved onto the cash allowance unless you were a store manager.
Same here, its a perk of the job no matter how many miles you do/dont do. And ^^^^ we get some random fuel rate which is supposed to cover fuel costs.. about 10-12ppm normally, so the tax relief can be worth more than the fuel payment at times!
colin_p said:
Condi said:
The real winners are the guys running 15 year old sheds and getting £500 a month for the privilege.
I'm one them.The lucky part is working for a company that doesn't have any maximum age stipulations on what car you drive, many do.
But running a shed does mean you need to be hands on and invest some of your time keeping it going. If you had to rely on putting your car into a garage for everything little thing then it is a nope.
I know this won't apply to anyone on PH but for 20% tax payers having a company car is generally still a no-brainer. Friend of one of my daughters is some sort of area manger in retail and has a MINI that costs her around £75/mth. Her insurance wouldn't be far off that, never mind the car.
Sheepshanks said:
I know this won't apply to anyone on PH but for 20% tax payers having a company car is generally still a no-brainer. Friend of one of my daughters is some sort of area manger in retail and has a MINI that costs her around £75/mth. Her insurance wouldn't be far off that, never mind the car.
It's often a no brainer for anyone who is younger, or lives in a high rated postcode, or has teenage kids who they want to drive, or has an accident/conviction history, or a combination of these. The personal insurance costs can be thousands, before you even start to pay for the car . colin_p said:
I'm one them.
The lucky part is working for a company that doesn't have any maximum age stipulations on what car you drive, many do.
But running a shed does mean you need to be hands on and invest some of your time keeping it going. If you had to rely on putting your car into a garage for everything little thing then it is a nope.
I was lucky with that too. Given a car allowance based on status rather actually needing it for work. £480 a month for driving my old car 8 miles a day. I did pick the car once though and it ruined my tax for years. never againThe lucky part is working for a company that doesn't have any maximum age stipulations on what car you drive, many do.
But running a shed does mean you need to be hands on and invest some of your time keeping it going. If you had to rely on putting your car into a garage for everything little thing then it is a nope.
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