Is it better to have a company car or a car allowance?
Discussion
My wife is a 40% tax payer. She currently has a company cat and looking at the tax bands she will be paying at least £108 per monthe on her new company car.
Would she be better off having a car allowance instead? The subject has been raised with her company, but nobody has really pushed it yet. If a car allowance is better off for her, what are the cost implications for the company?
I will google it as well, but I thought I'd ask the experts first!
Andy
Would she be better off having a car allowance instead? The subject has been raised with her company, but nobody has really pushed it yet. If a car allowance is better off for her, what are the cost implications for the company?
I will google it as well, but I thought I'd ask the experts first!
Andy
Yeah, I have just done some Googling and the issue in particular would seem to be the 40p per mile/10p per mile allowed by the Revenue.
On 25000 miles pa she could claim £7750. Assuming she does 45mpg (What she currently does in her Golf diesel) she would use 555 gals of fuel @ say £1.15 per litre = £6380 actual fuel cost.
Assuming thatthe car allowance 'buys' her car , that gives her £1500 pa to tax, insure etc. Not really worth the risk unless I have it wrong.
Additioanlly, a colleague of hers had adoor mirror knocked off whilst parked . She took it to the VW dealers to fix and it cost over £500. That would sort of take any profit/benefit out of the idea of a car allowance really.
I assume the main benefit of an allowance is that you own a car after 3 years paid for by the allowance.
On 25000 miles pa she could claim £7750. Assuming she does 45mpg (What she currently does in her Golf diesel) she would use 555 gals of fuel @ say £1.15 per litre = £6380 actual fuel cost.
Assuming thatthe car allowance 'buys' her car , that gives her £1500 pa to tax, insure etc. Not really worth the risk unless I have it wrong.
Additioanlly, a colleague of hers had adoor mirror knocked off whilst parked . She took it to the VW dealers to fix and it cost over £500. That would sort of take any profit/benefit out of the idea of a car allowance really.
I assume the main benefit of an allowance is that you own a car after 3 years paid for by the allowance.
Well the company car she can have is a 2.o tdi sport golf again, 140bhp and with the 6 speed dsg box if rerquired. She loves her existing one and to be honest is happy with a new one. We were just wondering if a car allowance would be significantly better or not. I feel that a company car is better in the event of a bump, change of job and for general lack of hassle.
If its her own purchased car if there is an issue where the car is off the road for a period of time, it could get tricky.
Of course, someone may be able to offer their experiences which might show an alternative view.
If its her own purchased car if there is an issue where the car is off the road for a period of time, it could get tricky.
Of course, someone may be able to offer their experiences which might show an alternative view.
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