Company car question
Discussion
As a field based technician, I currently run a private diesel car for work purposes, subsidised by the 45p/25p HMRC Fixed Profit Car Scheme.
Having checked my employment contract there is no section that mentions anything about vehicles at all. The arrangement was implemented by my former boss a few years ago, and in the interim the company has been sold. The new owners have not adjusted my contract or given me a new one.
However I have heard a rumour that as a 'tax-dodge' to the company's benefit, I will in the near future be forced to accept a new company provided hybrid instead.
This would cause a few problems for me.
Logistically, I simply have nowhere I can park it at home, while I own my current car.
Financially, I have commitments to a vehicle which was chosen specifically to fill the requirements of my job, with a view to running it indefinitely (or in the very least for another year before changing it).
Does anyone know where someone in my position stands with regard to this - do I have grounds to refuse an unwanted company car and continue with my current arrangement?
Advice gratefully received.
Having checked my employment contract there is no section that mentions anything about vehicles at all. The arrangement was implemented by my former boss a few years ago, and in the interim the company has been sold. The new owners have not adjusted my contract or given me a new one.
However I have heard a rumour that as a 'tax-dodge' to the company's benefit, I will in the near future be forced to accept a new company provided hybrid instead.
This would cause a few problems for me.
Logistically, I simply have nowhere I can park it at home, while I own my current car.
Financially, I have commitments to a vehicle which was chosen specifically to fill the requirements of my job, with a view to running it indefinitely (or in the very least for another year before changing it).
Does anyone know where someone in my position stands with regard to this - do I have grounds to refuse an unwanted company car and continue with my current arrangement?
Advice gratefully received.
Usual caveat, i'm not an employment lawyer.
I'd say that as there is nothing in your contract but you have been operating using your own car and that the company have happily paid your expenses on that basis then you have an implied contract and that any change would be a change to the terms of your employment. Assuming you have not been made redundant and then rehired or expressly agreed new terms then the fact that the company has been sold to somebody else makes no difference.
They may keen to get you in this hybrid (yes, let's save energy by putting another car on the road) but like a lot of people you probably do well out of the 45p/mile deal. How much of a fuss you kick up will depend on how much you think you can get away with, bearing in mind the current economic climate. In my experience the best idea is to put a logical and clear argument to your employer as to why you don't want to do this, particularly if you feel you will lose out financially.
You also need to ensure that the new hybrid will not attract any sort of "benefit in kind" tax liability (I don't know the rules are about hybrids) or you could lose out even more. I'd also check whether any personal use is allowed and how the fuel will be paid for.
I'd say that as there is nothing in your contract but you have been operating using your own car and that the company have happily paid your expenses on that basis then you have an implied contract and that any change would be a change to the terms of your employment. Assuming you have not been made redundant and then rehired or expressly agreed new terms then the fact that the company has been sold to somebody else makes no difference.
They may keen to get you in this hybrid (yes, let's save energy by putting another car on the road) but like a lot of people you probably do well out of the 45p/mile deal. How much of a fuss you kick up will depend on how much you think you can get away with, bearing in mind the current economic climate. In my experience the best idea is to put a logical and clear argument to your employer as to why you don't want to do this, particularly if you feel you will lose out financially.
You also need to ensure that the new hybrid will not attract any sort of "benefit in kind" tax liability (I don't know the rules are about hybrids) or you could lose out even more. I'd also check whether any personal use is allowed and how the fuel will be paid for.
Thanks Inkyfingers, that is a primary financial concern - I do enough travelling that my present car basically pays for itself and doesn't incur a BIK tax. Without even considering the finance/depreciation differential I would be significantly worse off, not to mention the trade down from a fairly nice car to a much smaller, slower and unpleasant hybrid.
t. And will cost me more.
XDA said:
Sell your own car and that'll solve your financial commitments and give you a parking space?
Yeah incase you missed the entire point of the question, I don't want to. My car rocks, the suggested replacement is st. And will cost me more.Edited by BS75 on Tuesday 26th June 09:11
BS75 said:
Yeah incase you missed the entire point of the question, I don't want to. My car rocks, the suggested replacement is st. And will cost me more.
Cost you how much more? My Golf Bluemotion only costs me £42 a month in tax and its not even a hybrid.t. And will cost me more.Edited by BS75 on Tuesday 26th June 09:11
How much is your car allowance?
I am not going to post my personal matters in that level of detail, so imagine that someone has finance on their current car with a year left in a hire purchase contract, the early termination of which would see them having to fork out the remaining amount in a lump sum (which they may not even have) plus penalty charges, and then take a depreciation hit of a couple thousand more by selling the car much earlier than planned.
And then on top of that having to pay another £42 / month for a car they'd rather chew their own arms off than spend 8 hours a day in.
Where does that person stand, with reference to my actual question which I will remind you is the refusal of the new arrangement that they haven't been consulted on?
And then on top of that having to pay another £42 / month for a car they'd rather chew their own arms off than spend 8 hours a day in.
Where does that person stand, with reference to my actual question which I will remind you is the refusal of the new arrangement that they haven't been consulted on?
You never stated that level of detail in your original post....
Surely if you haven't signed anything then you can't be forced to do it? I wouldn't be doing anything I hadn't agreed in writing to.
But you can't have it both ways? You've taken out a hire purchase on a car despite the fact you have nothing in writing from your employer? It's not really your employers problem that you decided to fund a car in the way you have?
Does your company have a car policy/document in place?
My feeling is that if you don't agree to the potential new terms, then your car allowance will stop and you'll have no choice but take a hybrid?
Surely if you haven't signed anything then you can't be forced to do it? I wouldn't be doing anything I hadn't agreed in writing to.
But you can't have it both ways? You've taken out a hire purchase on a car despite the fact you have nothing in writing from your employer? It's not really your employers problem that you decided to fund a car in the way you have?
Does your company have a car policy/document in place?
My feeling is that if you don't agree to the potential new terms, then your car allowance will stop and you'll have no choice but take a hybrid?
I haven't got any finance, I'm using an example - but the principle re: changing schemes is the same. There was no consultation, I've had no input into the choice of car, and making a change like this in this way COULD have huge ramifications for someone. How big they actually are to me now is irrelevant - the simple fact is it is a change that I don't want and I want to know if they can make me accept the changes and just arbitrarily give me a new contract that is full of terms I don't agree with.
If the new rule comes in just explain the situation and ask for a delay until your current car needs replacing.
You may have to accept the hybrid in the future though as it a work tool for work purposes. The company has to ensure that it is keeping control of its costs and complying with any duty of care responsibilities.
You may have to accept the hybrid in the future though as it a work tool for work purposes. The company has to ensure that it is keeping control of its costs and complying with any duty of care responsibilities.
Thanks for the input.It boils down to how much you running your Jag costs them.
Is it just the 25p/40p per mile?
Or do they insure it for business use too? Tyres? Maintenance?
If they're not paying any of that, or paying any other car allowance, it is probably not any better for them.
Just do the math and present the case.
Show them that you changing car will cost them more, and job done.
Is it just the 25p/40p per mile?
Or do they insure it for business use too? Tyres? Maintenance?
If they're not paying any of that, or paying any other car allowance, it is probably not any better for them.
Just do the math and present the case.
Show them that you changing car will cost them more, and job done.
BS75 said:
Yeah, that's what I'd like to avoid. Am I able to refuse it though, or do I simply have to take it when they chuck the keys at me?
What you mean is what are the consequences if you refuse to accept the new arrangement? Chances are your that your current agreement forms part of your contract of employment through custom and practice. Your employer can change the terms if there is a good business case for doing so, it doesn't impact on you too harshly and they act reasonably through consultation beforehandIf and when you are informed of this change you need to raise a grievance or respond to the consultation explaining why you will be caused hardship by the change. From what you have explained you may be able to postpone the change until the finance is up on your car but it is unlikely you could avoid it altogether if your employer is committed to make the change.
In simple terms, the more reasonable they are about the change and the less harsh it is on you the less likely they are to be found to have breached the contract.
Hi -I wondered how you got on with this. It was interesting to hear that it is a tax dodge for companies to give company cars, but my husband's costs more than it would do to keep our own car, and we can't afford it. I wondered if you or anyone else had any information about this as we really can't afford to keep the car, but my husband hasn't got any choice as far as we can see.
candiloo said:
Hi -I wondered how you got on with this. It was interesting to hear that it is a tax dodge for companies to give company cars, but my husband's costs more than it would do to keep our own car, and we can't afford it. I wondered if you or anyone else had any information about this as we really can't afford to keep the car, but my husband hasn't got any choice as far as we can see.
One possible solution for getting around the benefit in kind tax - accept the car for business use, but insist that you only use it for business......so keep your own private car, drive it to and from work, and get into the company car at the office. The only allowed exception is that you can take the company car home if the next day's journey is in a different direction to the office.And realistically, when you factor depreciation accelerated by higher mileage, it's quite tricky to run a car for 45p a mile all up.
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