Handing back a company car, opting for public transport

[badboyburt]

Wonder if anyone can offer any advice,

Had Co Cars for over 12 years and I have just driven them as I needed them for work.

Time has come to ditch the car in favour of public transport, my new place of work is in Lambeth so I have been driving there for the last few weeks from near Basildon, the quickest I can get there is 2hrs 35m, I have also taken the train+tube on a few occassions, 1hr 5m door to door no stress.

I have asked if I can ditch the car and use PT for the next 3 years as driving around 5hrs per day just to commute will drive me insane.

My query is this,

When I hand the car back is there anything that would change my salary as I see this as part of my numeration

My employer has agreed in principle (Still awaiting written confirmation)that they will re-imburse my travel expenses.

I am currently paying £32 PCM in Co Car Tax (Pug 308 SR 61 Plate)and as I dont use it for private use I dont pay any tax on fuel used as it is all booked out for work mileage.

Should I see a better tax code and should my salary change if at all ?

Sorry for the long post but ive never really understood Co cars as such.

[iva cosworth]

Probably would've been better to post this in "jobs and employment" forum....

[badboyburt]

Ah my apologies, if a mod could relocate I would be grateful.

[randlemarcus]

Is the Lambeth office permanent? If not, you should only really claim travel for 18 months, otherwise, this is deemed a permanent place of work by those lovely chaps at HMRC, and your employers ought not to reimburse you at all.

Losing the company car ought to result in losing the BIK, so slightly less tax paid.

[SidJames]

Interesting one.

Yes, if you ditch the car and inform HMRC you will get a lower tax code. (You can roughly work it out if you use the car tax calculator on HMRC's website.)

However, if you are playing the game you should declare the public transport expenses as additional income, also to be taxed. Depends obviously on that cost versus the car tax, as to whether you'd be financially better off.

[4lf4-155]

Your tax code will change if you have given the car back as you will no longer be in receipt of a benefit so the benefit in kind tax stops.

If it was my scheme (salary sacrifice) my monthly income will go up - your situation will depend on how the car is paid for.

Is it out of your salary or by the company itself?

[badboyburt]

randlemarcus said:

Is the Lambeth office permanent? If not, you should only really claim travel for 18 months, otherwise, this is deemed a permanent place of work by those lovely chaps at HMRC, and your employers ought not to reimburse you at all.

Losing the company car ought to result in losing the BIK, so slightly less tax paid.

Im a project manager, the site will be split over 3 areas in phases each lasting 12-14 months with a few months overlapping so effectively 3 offices over 3 years within a few postcodes.

BIK, something else im not too clear on, ill look that up on google, thanks.

[badboyburt]

SidJames said:

Interesting one.

Yes, if you ditch the car and inform HMRC you will get a lower tax code. (You can roughly work it out if you use the car tax calculator on HMRC's website.)

However, if you are playing the game you should declare the public transport expenses as additional income, also to be taxed. Depends obviously on that cost versus the car tax, as to whether you'd be financially better off.

I will inform HMRC, I should of explained in the initial post, the place of work wont exceed the 18months as mentioned in randiemarcus post.

I will look at the car tax calculator.

[badboyburt]

4lf4-155 said:

Your tax code will change if you have given the car back as you will no longer be in receipt of a benefit so the benefit in kind tax stops.

If it was my scheme (salary sacrifice) my monthly income will go up - your situation will depend on how the car is paid for.

Is it out of your salary or by the company itself?

Paid for by the Co itsel as I only pay Co Car tax on the value of the vehicle.

I need to contact my fleet Dept and HR Dept, i havent a clue what to write or ask for.

Just need to make sure im not financially any worse off.

[tjl]

Won't the employer give you a car allowance in lieu of a company car ?

[badboyburt]

tjl said:

Won't the employer give you a car allowance in lieu of a company car ?

Yes they will but I dont wish to use my personal car. I would prefer the hr or so on Public transport.

[kiethton]

badboyburt said:

Yes they will but I dont wish to use my personal car. I would prefer the hr or so on Public transport.

The car allowance is the ideal scenario - gives you additional pay (that is taxed as salary) so you then just hire cars/use public transport as and when necessary with the latter via expenses if permitted.

[badboyburt]

kiethton said:

The car allowance is the ideal scenario - gives you additional pay (that is taxed as salary) so you then just hire cars/use public transport as and when necessary with the latter via expenses if permitted.

Oh right, I thought it had to be used on a car,

Sorry i have ltd knowledge on this subject, so I can ask to have the allowance and still put train expenses into accounts each month ?

[kiethton]

badboyburt said:

kiethton said:

The car allowance is the ideal scenario - gives you additional pay (that is taxed as salary) so you then just hire cars/use public transport as and when necessary with the latter via expenses if permitted.

Oh right, I thought it had to be used on a car,

Sorry i have ltd knowledge on this subject, so I can ask to have the allowance and still put train expenses into accounts each month ?

Not necessarily but usually means you need access to a car - hire car for when you do

Dependant on company terms though

[badboyburt]

I own a V8, but as with all things non eco they wont pay the mileage on it lol as it doesnt fit in with the Co image.

But that said it ticks the box on a car available to use.

[SidJames]

badboyburt said:

Oh right, I thought it had to be used on a car,

Sorry i have ltd knowledge on this subject, so I can ask to have the allowance and still put train expenses into accounts each month ?

That would be very accomodating of your employer! Most wouldn't let you have both, you'd have to the "car allowance" for means of other travel if it's for private milage so to speak. i.e. getting to and from work.

[kiethton]

SidJames said:

badboyburt said:

Oh right, I thought it had to be used on a car,

Sorry i have ltd knowledge on this subject, so I can ask to have the allowance and still put train expenses into accounts each month ?

That would be very accomodating of your employer! Most wouldn't let you have both, you'd have to the "car allowance" for means of other travel if it's for private milage so to speak. i.e. getting to and from work.

Your only normally allowed the expenses if it isn[t your normal place of work.

e.g. my dad's a Quantity Surveyor/PM

He had a car allowance but often elected to take the train if the site was in london. He typically worked from home, he claimed the mileage if travelling by car (18ppm with the rest via tax return to 45p) or the cost of the train (travelcard) if he chose to take that

Depends what your permanent place of work is and your employers policies

[tjl]

badboyburt said:

Oh right, I thought it had to be used on a car,

Sorry i have ltd knowledge on this subject, so I can ask to have the allowance and still put train expenses into accounts each month ?

The answer probably depends on your company's expenses policy. To give you a hypothetical example, you might be offered a company car where the lease payments were 300 per month, and you can claim 10p per mile for mileage to destinations which are not your office base to cover the cost of petrol. You pax tax on the BIK of the car through your tax code.

In lieu, the company may offer you a car allowance of say 500 per month, which is taxed as salary, and you have to pay your own insurance , repairs etc, but your tax code is better because you don't have the benefit in kind. You would normally be able to claim 45 p per mile on your own car. In my last job, where I had allowance rather than car, I was driving an old shed that was paid for and the car allowance was really just extra salary.

The company is saving money by not having to supply a company car, so you might expect them to offer an allowance instead

I now have a company car, but if I'm going to a meeting in London, I would claim the rail fare, parking etc. Same would apply if I had a car allowance. My employer wouldn't expect me to drive into town

If you have a good HR department, they ought to be able to explain it properly

[badboyburt]

Cheers for the posts, I will contact HR tomorrow and ask about different procedures and see how it pans out, thanks for the information, very mind boggling but very informative.

[kiethton]

tjl said:

badboyburt said:

Oh right, I thought it had to be used on a car,

Sorry i have ltd knowledge on this subject, so I can ask to have the allowance and still put train expenses into accounts each month ?

The answer probably depends on your company's expenses policy. To give you a hypothetical example, you might be offered a company car where the lease payments were 300 per month, and you can claim 10p per mile for mileage to destinations which are not your office base to cover the cost of petrol. You pax tax on the BIK of the car through your tax code.

In lieu, the company may offer you a car allowance of say 500 per month, which is taxed as salary, and you have to pay your own insurance , repairs etc, but your tax code is better because you don't have the benefit in kind. You would normally be able to claim 45 p per mile on your own car. In my last job, where I had allowance rather than car, I was driving an old shed that was paid for and the car allowance was really just extra salary.

The company is saving money by not having to supply a company car, so you might expect them to offer an allowance instead

I now have a company car, but if I'm going to a meeting in London, I would claim the rail fare, parking etc. Same would apply if I had a car allowance. My employer wouldn't expect me to drive into town

If you have a good HR department, they ought to be able to explain it properly

^^^^^^

That has articulated what i'd been trying to say far better than I could....