Company Car newbie
Discussion
Starting a new job later this week, been offered a company car in exchange for £1800 of my wages. I tried to enquire as to what the car choices/what was available for that money as I dont want/need a small hatch. Lady over the phone said she doesnt know and to just ask when I start.
Ended up saying no for now (can opt in later) but as someone who hasnt ever had a company car I dont understand how they work. Im assuming I dont just get given a new car every few years and dont have to pay anything extra beyond the lesser income?
Ended up saying no for now (can opt in later) but as someone who hasnt ever had a company car I dont understand how they work. Im assuming I dont just get given a new car every few years and dont have to pay anything extra beyond the lesser income?
If you're a 20% taxpayer, £1800 of your wages is only £1440 take home pay, or £120/month. If you're 40%, it's only £1080 take home, or £90 month.
So you'll lose out on that. Plus you'll pay BIK tax (benefit in kind) which will depend on the list price/ co2 rating of the car you get.
But you'll only pay private fuel. everything else will be paid for by the firm. Servicing, lease or purchase costs, insurance, tyres, all paid for.
So you'll lose out on that. Plus you'll pay BIK tax (benefit in kind) which will depend on the list price/ co2 rating of the car you get.
But you'll only pay private fuel. everything else will be paid for by the firm. Servicing, lease or purchase costs, insurance, tyres, all paid for.
TwigtheWonderkid said:
Plus you'll pay BIK tax (benefit in kind)..
Maybe not if it's a salary sacrifice deal. Or it might already be worked into the figures.Really, it's impossible to comment in detail without knowing some more about scheme on offer and the OPs type of use (business vs pleasure) etc.
Generally, though, it's a no-brainer in strict financial terms to take the car. But if you hate the car offered, or it doesn't suit your circumstances, then it's a bit pointless.
Could well be an employee car ownership scheme, where the company basically subsidizes a loan to you to buy the vehicle behind the scenes as it works out to be a better deal tax wise for you to salary sacrifice. You won't have to pay any BIK at the moment in this case.
I'd ask plenty of questions as these schemes are under a lot of scrutiny by HMRC at the minute via the Finance Act 2017 and are subject to change.
My company car (delivered 3 week ago) is on this type of scheme but an email from fleet was sent out last week saying all new company car orders are currently suspended until they understand what is going on moving forward.
I'd ask plenty of questions as these schemes are under a lot of scrutiny by HMRC at the minute via the Finance Act 2017 and are subject to change.
My company car (delivered 3 week ago) is on this type of scheme but an email from fleet was sent out last week saying all new company car orders are currently suspended until they understand what is going on moving forward.
Sheepshanks said:
TwigtheWonderkid said:
Plus you'll pay BIK tax (benefit in kind)..
Maybe not if it's a salary sacrifice deal. Or it might already be worked into the figures.TwigtheWonderkid said:
Sheepshanks said:
TwigtheWonderkid said:
Plus you'll pay BIK tax (benefit in kind)..
Maybe not if it's a salary sacrifice deal. Or it might already be worked into the figures.SWoll said:
If it's just a basic hatchback and the company are subsidizing it as a perk then £150 a month might make sense?
I am going back a bit but one of the bank/ credit card operators near us (Chester) was giving staff Renault Clios as a perk and the overall cost to employees was £60/mth - so £150/mth now for a similar car seems feasible.Edited by Sheepshanks on Wednesday 12th April 15:01
I think that a salary sacrifice scheme that gave employees cars for way below the market rate would fall foul of HMRC and probably attract a BIK penalty regardless of ownership.
The usual method is to supply them at market rate or maybe slightly under due to bulk buy arrangements, but the employee saves money on the tax not being paid on the salary being sacrificed.
The usual method is to supply them at market rate or maybe slightly under due to bulk buy arrangements, but the employee saves money on the tax not being paid on the salary being sacrificed.
I've been "retired" for 7 years, so things have probably changed. My last company car was a "job need" Mazda 6 TS2 estate, on a car ownership scheme. £52 a month salary deduction, no tax liability. It was possible to get the benchmark car, Astra 1.7d estate, for less than £20 a month.
I also had a reimburse fuel card. I had to log total and business miles each month, and pay them back 11p a mile for private use.
I also had a reimburse fuel card. I had to log total and business miles each month, and pay them back 11p a mile for private use.
Found it out from the manager. New hatchback every month, fiesta type things - cheap and cheerfull with no choice of what I get.
Have to pay the bik as well, other guys said it runs about £250-£300 a month all in including the insurance.
Decided im not going to bother with it. Doesnt feel good value for money even if I wanted a small hatch.
Have to pay the bik as well, other guys said it runs about £250-£300 a month all in including the insurance.
Decided im not going to bother with it. Doesnt feel good value for money even if I wanted a small hatch.
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