Company Car Allowance???
Discussion
Hi
I'm seriously confused and need some help. I've been offered a new job with a salary of £36k I will get a car allowance of £400pcm. If this is paid as part of my salary will it be subject to regular tax rules? Any idea how much of it i'll see each month? My employer is also paying me 15p per mile for business use, I estimate i'll be doing roughly 15,000 business miles per year. I notice on HMRC website the recommended amount is 45p per business mile for the first 10,000 and 20p after 10,000. Can I claim the difference in tax relief?
Seriously those with company cars/car allowances are screwed over hey! I'm also thinking now when we get company bonus every year, that will take me over the £40k and 40% of my bonus will be taxed is that correct? Seriously they don't give you any incentive to work hard in this country hey!
I'm seriously confused and need some help. I've been offered a new job with a salary of £36k I will get a car allowance of £400pcm. If this is paid as part of my salary will it be subject to regular tax rules? Any idea how much of it i'll see each month? My employer is also paying me 15p per mile for business use, I estimate i'll be doing roughly 15,000 business miles per year. I notice on HMRC website the recommended amount is 45p per business mile for the first 10,000 and 20p after 10,000. Can I claim the difference in tax relief?
Seriously those with company cars/car allowances are screwed over hey! I'm also thinking now when we get company bonus every year, that will take me over the £40k and 40% of my bonus will be taxed is that correct? Seriously they don't give you any incentive to work hard in this country hey!
A car allowance is treated like normal income, so it will be taxed at 20% on your salary (unless your bonus takes you into the 40% bracket. You are effectively getting £4800 more salary, rather than a car.
A lot of employers seem to be offering allowances now as it can work out better for the employee as company car tax can be a lot. It also means that the employer doesn't have to stump up cash for a car and maintain it.
I would check the mileage though. 15p is usually paid to company car owners as it just covers the cost of fuel. The 45p is usually paid to private car owners because it is meant to cover depreciation, tyres, servicing etc. If you have an allowance and use your own car and only going to get paid 15p per mile you may end up out of pocket.
Do the maths on all the options to see which works out best for you. Use listen to tax man website to calculate the income. The is also a company car tax calc on the HMRC website.
A lot of employers seem to be offering allowances now as it can work out better for the employee as company car tax can be a lot. It also means that the employer doesn't have to stump up cash for a car and maintain it.
I would check the mileage though. 15p is usually paid to company car owners as it just covers the cost of fuel. The 45p is usually paid to private car owners because it is meant to cover depreciation, tyres, servicing etc. If you have an allowance and use your own car and only going to get paid 15p per mile you may end up out of pocket.
Do the maths on all the options to see which works out best for you. Use listen to tax man website to calculate the income. The is also a company car tax calc on the HMRC website.
Having a car allowance and getting 45ppm would be ambitious. The rate is lower because the "wear and tear" should be covered in the allowance. It's a bit low (we get £500pm), and the rate is a bit low as it's what HMRC recommend for company car drivers. I think we get 17ppm.
Yes, you can claim the difference in tax relief so for you that be around £3500.
Yes, you can claim the difference in tax relief so for you that be around £3500.
In my existing job I get £700 gross or £410net per Callander month car allowance. This is very generous and we at lucky.
We also just get a fuel card as well but we have our private mileage deducted from our pay at 12p per mile to cover the fuel, which works out about right to be honest.
We also just get a fuel card as well but we have our private mileage deducted from our pay at 12p per mile to cover the fuel, which works out about right to be honest.
Frik said:
Having a car allowance and getting 45ppm would be ambitious. The rate is lower because the "wear and tear" should be covered in the allowance. It's a bit low (we get £500pm), and the rate is a bit low as it's what HMRC recommend for company car drivers. I think we get 17ppm.
Yes, you can claim the difference in tax relief so for you that be around £3500.
I get £675 (Gross) per month plus 45p for the first 10,000 then 25p after (no restrictions) Yes, you can claim the difference in tax relief so for you that be around £3500.
, however I work for a very good company allowed me to run a Legacy Spec B and still be up... now running a ST170 due to some bint writing it off..Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff