£5000 car allowance from new employer...
Discussion
Hi all,
a friend has been offered a new job. The salary is £34000 and the car allowance is £5000.
I am looking to best advise my friend on what options they have and hope you can all help.
They would be looking for a car which is comfortable as they would be in the car for extended periods, reliable and fuel efficient due to the miles being covered. I believe business miles would be re-imbursed at approximately 30p per mile.
Therefore can they lease a car with inclusive insurance and maintenance etc. It would be their first insurance policy as they have always driven a company car.
Look forward to your advice.
a friend has been offered a new job. The salary is £34000 and the car allowance is £5000.
I am looking to best advise my friend on what options they have and hope you can all help.
They would be looking for a car which is comfortable as they would be in the car for extended periods, reliable and fuel efficient due to the miles being covered. I believe business miles would be re-imbursed at approximately 30p per mile.
Therefore can they lease a car with inclusive insurance and maintenance etc. It would be their first insurance policy as they have always driven a company car.
Look forward to your advice.
I read on GG forum about the 320 ED being available for £350pm, and with decent kit levels, none too shabby performance too.
£1.20 a litre equates to £5.44 per gallon, divide by 68 = 8p a mile in diesel.
So if he's doing 10,000 miles a year and gets 30p a mile, thats £2200 profit.
Another option is the Focus TDCi Econetic, that will do another 10mpg on top of the 320 ED.
Lings Cars worth a look.
£1.20 a litre equates to £5.44 per gallon, divide by 68 = 8p a mile in diesel.
So if he's doing 10,000 miles a year and gets 30p a mile, thats £2200 profit.
Another option is the Focus TDCi Econetic, that will do another 10mpg on top of the 320 ED.
Lings Cars worth a look.
Edited by MondeoMan1981 on Thursday 25th November 22:27
The £5000 is taxable so is only worth £4K.
30p per mile would be unusually high - 15p or so is more typical.
Whatever the mileage rate, tax can be recovered on the difference between the amount payable and 40p for the first 10K biz miles, and 25p for higher mileage.
What's his total annual mileage likely to be? You can include maint on lease, ot buy a package from BMW (or most other manufacturers). I'm not aware of any insurance inclusive packages, but if he gets a letter from his company insurer about his claims history then he will be able to get a no claims discount (assuming has hasn't had any claims).
30p per mile would be unusually high - 15p or so is more typical.
Whatever the mileage rate, tax can be recovered on the difference between the amount payable and 40p for the first 10K biz miles, and 25p for higher mileage.
What's his total annual mileage likely to be? You can include maint on lease, ot buy a package from BMW (or most other manufacturers). I'm not aware of any insurance inclusive packages, but if he gets a letter from his company insurer about his claims history then he will be able to get a no claims discount (assuming has hasn't had any claims).
MondeoMan1981 said:
I read on GG forum about the 320 ED being available for £350pm, and with decent kit levels, none too shabby performance too.
£1.20 a litre equates to £5.44 per gallon, divide by 68 = 8p a mile in diesel.
So if he's doing 10,000 miles a year and gets 30p a mile, thats £2200 profit.
Another option is the Focus TDCi Econetic, that will do another 10mpg on top of the 320 ED.
Lings Cars worth a look.
Thanks for highlighting the BMW 320 ED. A 2 ltr engine is a nice mix of power and fuel efficency.£1.20 a litre equates to £5.44 per gallon, divide by 68 = 8p a mile in diesel.
So if he's doing 10,000 miles a year and gets 30p a mile, thats £2200 profit.
Another option is the Focus TDCi Econetic, that will do another 10mpg on top of the 320 ED.
Lings Cars worth a look.
Edited by MondeoMan1981 on Thursday 25th November 22:27
So £350 per month is interesting, albeit seems really low? Surely that would be finance taken over a long period of time or with a big deposit?
What is the GG forum?
I will take a look at Lings cars.
Thanks.
Deva Link said:
The £5000 is taxable so is only worth £4K.
30p per mile would be unusually high - 15p or so is more typical.
Whatever the mileage rate, tax can be recovered on the difference between the amount payable and 40p for the first 10K biz miles, and 25p for higher mileage.
What's his total annual mileage likely to be? You can include maint on lease, ot buy a package from BMW (or most other manufacturers). I'm not aware of any insurance inclusive packages, but if he gets a letter from his company insurer about his claims history then he will be able to get a no claims discount (assuming has hasn't had any claims).
I looked up the HMRC and it shows that earning over £37400 is taxed at 40%. So of the £5000 allowance there is £3400 taxed at 20% and £1600 taxed at 40%. Therefore £3400 becomes £2720 and £1600 becomes £960. Adding the two taxed amounts together (i.e. £2720 and £1600) = £4320 / 12 = £360 pcm?30p per mile would be unusually high - 15p or so is more typical.
Whatever the mileage rate, tax can be recovered on the difference between the amount payable and 40p for the first 10K biz miles, and 25p for higher mileage.
What's his total annual mileage likely to be? You can include maint on lease, ot buy a package from BMW (or most other manufacturers). I'm not aware of any insurance inclusive packages, but if he gets a letter from his company insurer about his claims history then he will be able to get a no claims discount (assuming has hasn't had any claims).
Is that right?
I would like to be assured of the 30p a mile before recommending any cars.
Not sure of annual mileage yet?
I know they have had a company car with a few employers over the years and so is it still easy for them to say you have a full no claims discount or is it only your last employer that can provide this evidence and only for the amount of time you were employed by them?
gordonhunter said:
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I looked up the HMRC and it shows that earning over £37400 is taxed at 40%. So of the £5000 allowance there is £3400 taxed at 20% and £1600 taxed at 40%. Therefore £3400 becomes £2720 and £1600 becomes £960. Adding the two taxed amounts together (i.e. £2720 and £1600) = £4320 / 12 = £360 pcm?
Is that right?
No.I looked up the HMRC and it shows that earning over £37400 is taxed at 40%. So of the £5000 allowance there is £3400 taxed at 20% and £1600 taxed at 40%. Therefore £3400 becomes £2720 and £1600 becomes £960. Adding the two taxed amounts together (i.e. £2720 and £1600) = £4320 / 12 = £360 pcm?
Is that right?
gordonhunter said:
I would like to be assured of the 30p a mile before recommending any cars.
Not sure of annual mileage yet?
I know they have had a company car with a few employers over the years and so is it still easy for them to say you have a full no claims discount or is it only your last employer that can provide this evidence and only for the amount of time you were employed by them?
Honestly - stay out of it. It looks simple but it's furiously complicated as there are so many variables - if people don't knwo the pence per mile figures, typical mileage etc themselves then you haven't got a hope in hell of making a sensible suggestion on behalf of them. And then he'll go off and buy some completely random car.Not sure of annual mileage yet?
I know they have had a company car with a few employers over the years and so is it still easy for them to say you have a full no claims discount or is it only your last employer that can provide this evidence and only for the amount of time you were employed by them?
AliV6 said:
Why the need to post sarary information??
Why does this bother you. I only stated it because it has an effect on how much of the allowance can actually be used for paying a car as the combined salary crosses from the normal tax bracket into the higher tax bracket. Stop being so sensitive.Gassing Station | Scotland | Top of Page | What's New | My Stuff