I'm wasteful with money, need advice and have a goal...
Discussion
Eric Mc said:
If you have a company car, how come your PAYE Tax Code is 1060L? 1060L indicates that the full, normal, personal tax allowances for 2015/16 of £10,600 is being offset against your salary.
However, when an individual has a Benefit in Kind, such as a company car, HMRC will tax them on this benefit by reducing the level of personal tax allowances. In fact, in many cases, a company car can completely wipe out your personal tax allowances.
Are you therefore paying too little tax?
Is there a big tax shock heading your way when HMRC realise they haven't taxed you properly on your company car?
I don't know, that's why I'm having an accountant look at it in January.However, when an individual has a Benefit in Kind, such as a company car, HMRC will tax them on this benefit by reducing the level of personal tax allowances. In fact, in many cases, a company car can completely wipe out your personal tax allowances.
Are you therefore paying too little tax?
Is there a big tax shock heading your way when HMRC realise they haven't taxed you properly on your company car?
I've had a company car for 4 years and before that I took the opt-out allowance.
AyBee said:
What are the rates on your ISA? I opened up a Halifax HtB ISA last week - 4% (no tax) and then 25% extra when you buy seems like a bit of a no-brainer if you're looking to buy at some point in the future. Set up a standing order for £200 to go out the day after payday and forget about it 
I'd then look at something like the Classic Plus from TSB which pays 5% (pre-tax) on balances up to £2000 or the Sandander 123 at 3% (pre-tax). You have to stick £500 in to those two accounts each month but you can set up £500 to cycle through them, i.e. pay £500 into TSB and then £200 out of that into a HtB ISA.
Best of luck
Many thanks. I'd then look at something like the Classic Plus from TSB which pays 5% (pre-tax) on balances up to £2000 or the Sandander 123 at 3% (pre-tax). You have to stick £500 in to those two accounts each month but you can set up £500 to cycle through them, i.e. pay £500 into TSB and then £200 out of that into a HtB ISA.Best of luck
thenortherner said:
russ_a said:
Your Net pay is around £900 light. Get rid of the company car!
Really? Can't be right, can it? It's a MINI Cooper SD, so very low tax bracket is worth £23500 in terms of BIK.Perhaps the £2200 was less than I'd thought. Here's last months's payslip detail. Where am I going wrong?
Ps. Stuck with the car for 3 more years I'm afraid. And I do 5000 business miles a year and wouldn't fancy sticking that on a private car, not least one I'd like to run if it were my own money.
Payslip details as below:
Basic - £3929
Pension / salary exchange - £39
Chargeable benefits:
Car benefit - £371
Medical insurance/private health care - £62
Tax - £823
Fuel - £232
Car trade up value - £2
Total pay = £3890
Total deduction = £1408
Net pay = £2481
Edited by forest07 on Friday 18th December 16:36
thenortherner said:
rb5er said:
£230 to fuel a diesel mini for a month?
Get rid of that crap.
Based on what? And you'd know how many miles I'd travelled that month, or any month, to come to that conclusion?Get rid of that crap.
Have a read of the rest of the thread. I'm sure I mentioned it didn't look right and I'd be looking into it. I have since done - I'd not completed my mileage submission before cut off, therefore all fuel spend (read £230) was deducted from my wage in a month where over half of this spend was business related. I got the difference back the following month.
Thanks for your input though.
Its a mini and a diesel so how can you do £230 a month unless you are doing loads more miles?
Then theres the tax. That mini is costing you alot of money overall.
Realising you need to save rather than spend is the first hurdle, so your already 50% of the way there!!
I found setting up a standing order that directly transferred X amount of my salary each month into a savings account/ISA a really good way to save. The current help to buy ISA is a 'no brainer' if your looking to get on to the property ladder.
Finally nice cars are expensive toys (allowance or not), if you really want to save money, get some thing cheaper.
I found setting up a standing order that directly transferred X amount of my salary each month into a savings account/ISA a really good way to save. The current help to buy ISA is a 'no brainer' if your looking to get on to the property ladder.
Finally nice cars are expensive toys (allowance or not), if you really want to save money, get some thing cheaper.
thenortherner said:
I don't know, that's why I'm having an accountant look at it in January.
I've had a company car for 4 years and before that I took the opt-out allowance.
This happened to me. I had the "luxury" of a company car or a cash instead option. Halfway through a tax year I took the company car, had the rest of that year and then a following year being on a normal 960L Tax code or whatever it was at the time. Then then I moved jobs and the tax man caught up with me for unpaid tax on the car for almost 20 months. I turned to my employer and they said that it was my responsibility to tell them that my circumstances had changed and I should be doing a tax return and not depending on their PAYE tax. My tax code has only just sorted itself out. You could be getting a huge bill come your way so I suggest you start with that first!I've had a company car for 4 years and before that I took the opt-out allowance.
oldaudi said:
thenortherner said:
I don't know, that's why I'm having an accountant look at it in January.
I've had a company car for 4 years and before that I took the opt-out allowance.
This happened to me. I had the "luxury" of a company car or a cash instead option. Halfway through a tax year I took the company car, had the rest of that year and then a following year being on a normal 960L Tax code or whatever it was at the time. Then then I moved jobs and the tax man caught up with me for unpaid tax on the car for almost 20 months. I turned to my employer and they said that it was my responsibility to tell them that my circumstances had changed and I should be doing a tax return and not depending on their PAYE tax. My tax code has only just sorted itself out. You could be getting a huge bill come your way so I suggest you start with that first!I've had a company car for 4 years and before that I took the opt-out allowance.
I've not moved employers in 6 years.
One question I'll be asking the accountant is if they're obligated to report if they find I'm 'winning' as far as tax goes, unless someone can help me here?
Anyhow, £1.5K in the bank, personal expenses processed today and will go through in Jan 4th. So the best part of £5K will be in my savings in a few weeks time. I still need to write to the Student Loans Co to claim my over payment - they confirm I'm owed £500 too.
All in all I feel a bit more in control of things. It's even turned me into a tight b
d as far as claiming for expenses, things I'd have just swallowed up in the past. A 25 mile round trip at the weekend to have the tyres changed on my co. car has been claimed for! And £4.50 for a coffee and cake had on the motorway due to a 320 mile round trip for a 1 hour meeting also claimed for!I've also applied to have the council tax band re-appraised on my flat. Can't believe it's band C for a 1 bed flat. The lying b
d estate agents told me it was a B too.thenortherner said:
The trouble is there's quite a lot of differing opinion on here - some say I'm paying too much in co. car tax and others too little. So the best way is to see an accountant.
I've not moved employers in 6 years.
One question I'll be asking the accountant is if they're obligated to report if they find I'm 'winning' as far as tax goes, unless someone can help me here?
Perhaps i've misunderstood what you're asking with the last sentence. If not and by "winning" you mean not paying enough tax, then the accountant's obligations don't come into it - you are obligated to put it right.I've not moved employers in 6 years.
One question I'll be asking the accountant is if they're obligated to report if they find I'm 'winning' as far as tax goes, unless someone can help me here?
coletrickle01 said:
thenortherner said:
The trouble is there's quite a lot of differing opinion on here - some say I'm paying too much in co. car tax and others too little. So the best way is to see an accountant.
I've not moved employers in 6 years.
One question I'll be asking the accountant is if they're obligated to report if they find I'm 'winning' as far as tax goes, unless someone can help me here?
Perhaps i've misunderstood what you're asking with the last sentence. If not and by "winning" you mean not paying enough tax, then the accountant's obligations don't come into it - you are obligated to put it right.I've not moved employers in 6 years.
One question I'll be asking the accountant is if they're obligated to report if they find I'm 'winning' as far as tax goes, unless someone can help me here?
Wouldn't mind so much but it's a massive organisation and there's easily 100-150+ co. car users.
thenortherner said:
You've understood it correctly, but I'll wait to see what they say. Co-incidentally, all co. car users had a couple of emails from HR recently telling us that we may receive a letter from HMRC ref. us not paying enough tax - but on both occasions the email said we were to ignore this and they were working with HMRC to put it right. Starting to make me wonder...
Wouldn't mind so much but it's a massive organisation and there's easily 100-150+ co. car users.
Your employer will submit a P11D direct to HMRC which will list your benefits and their values. This should be done annually by the employer.Wouldn't mind so much but it's a massive organisation and there's easily 100-150+ co. car users.
forest07 said:
thenortherner said:
You've understood it correctly, but I'll wait to see what they say. Co-incidentally, all co. car users had a couple of emails from HR recently telling us that we may receive a letter from HMRC ref. us not paying enough tax - but on both occasions the email said we were to ignore this and they were working with HMRC to put it right. Starting to make me wonder...
Wouldn't mind so much but it's a massive organisation and there's easily 100-150+ co. car users.
Your employer will submit a P11D direct to HMRC which will list your benefits and their values. This should be done annually by the employer.Wouldn't mind so much but it's a massive organisation and there's easily 100-150+ co. car users.
Then again, I've had a car / the same benefits for 4 years so there'd be no change?
thenortherner said:
Chargeable benefits:
Car benefit - £371
Medical insurance/private health care - £62
You could do with clarifying with HR before you meet the accountant, but I reckon they've put the gross BIK values there. It looks spot on for the car and the medical figure is a pretty typical company scheme monthly cost.Car benefit - £371
Medical insurance/private health care - £62
Your actual cost is tax at 40% of those figures - so the car is costing you £125/mth. It's not clear whether that's actually being taken or not, as the figures you posted don't add up, but as others have commented, on the face of it you're not paying as your tax code looks wrong.
I always remember Martin Lewis's advice...
1. Continue to spend on the things you do (brand-wise), but buy them as cheaply as possible/practical.
- Same standard of living for less $.
2. Continue to buy the same things, but reduce the brand level.
- Similar (probably indistiguishable from before) standard of living for much less $$, but brand snobbery takes a hit.
3. Stop buying the things you want, but don't need.
- Massive savings, but there is also a major hit to your former lifestyle.
I would suggest that you are at Stage 1, because EVERYONE is.
Everyone should be aware that there is Income and Expenditure. Don't just concentrate on maximising Income. Minimising Expenditure is equally (if not more) important.
1. Continue to spend on the things you do (brand-wise), but buy them as cheaply as possible/practical.
- Same standard of living for less $.
2. Continue to buy the same things, but reduce the brand level.
- Similar (probably indistiguishable from before) standard of living for much less $$, but brand snobbery takes a hit.
3. Stop buying the things you want, but don't need.
- Massive savings, but there is also a major hit to your former lifestyle.
I would suggest that you are at Stage 1, because EVERYONE is.
Everyone should be aware that there is Income and Expenditure. Don't just concentrate on maximising Income. Minimising Expenditure is equally (if not more) important.
Sheepshanks said:
thenortherner said:
Chargeable benefits:
Car benefit - £371
Medical insurance/private health care - £62
You could do with clarifying with HR before you meet the accountant, but I reckon they've put the gross BIK values there. It looks spot on for the car and the medical figure is a pretty typical company scheme monthly cost.Car benefit - £371
Medical insurance/private health care - £62
Your actual cost is tax at 40% of those figures - so the car is costing you £125/mth. It's not clear whether that's actually being taken or not, as the figures you posted don't add up, but as others have commented, on the face of it you're not paying as your tax code looks wrong.
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