£6700 Car Allowance to spend

[Mr_S]

I need to buy a car to use for work who have agreed to pay £6700 per year as a car allowance.

I have no deposit or funds with which to buy a car so was thinking of getting a 36 month loan of £11000 and buying a 2009 Vauxhall Insignia or maybe a 2007 VW Passat.

Repayments would be about £360 a month which woulod leave me about £200 a month to tax, insure and maintain it. Work will give me 0.14p a mile towards fuel.

What would you buy? (need room for wife and kids and Automatic preferably)

Am I spending too much? not leaving enough to maintain the car.

Cheers

[clarkey]

You'll be paying tax on the car allowance too, so you've got nothing like £560 a month to spend. Unless that is the figure after tax?

[V88Dicky]

This should ensure you arrive at work/home refreshed and relaxed



http://www.autotrader.co.uk/classified/advert/2010...

[randlemarcus]

Don't forget you can claim the difference between the 0.14 and the HMRC rate of 45p per mile up to 10000 back from the gubbermint.

[edo]

If you are getting a car allowance of £6700, then you need to take into account that you will loose tax on this like normal salary - possibly 40% of it depending on how much you earn...

[Fume troll]

Maybe a stupid question, but do you have to spend it all on a car? Any car allowances I've had have been treated as income anyway.

Cheers,

FT.

[clarkey]

randlemarcus said:

Don't forget you can claim the difference between the 0.14 and the HMRC rate of 45p per mile up to 10000 back from the gubbermint.

Isn't it still 40ppm up to 10,000 and 25ppm above?

[randlemarcus]

clarkey said:

randlemarcus said:

Don't forget you can claim the difference between the 0.14 and the HMRC rate of 45p per mile up to 10000 back from the gubbermint.

Isn't it still 40ppm up to 10,000 and 25ppm above?

Probably. Written from the depths of my memory

[teen_cerbera]

Fully maintained Contract Hire for £450/month and £100/month Insurance?

[halo34]

If its 40% tax then you are down to 4020 before you start, which equates to £335 per month assuming an average month.

Thats to tax, insure and maintain as well as purchase presumably?

By time you factor all that in (call it £85 per month) then you are left with circa £250 to play with?

If not 40% tax or the 6k has tax factored in then ignore the above.

Just remember to factor in maintenance if you want to buyer an older cheaper car.

Alternative to go is buy old banger outright and pocket the cash - which I did for a while recently.

[Matt UK]

clarkey said:

You'll be paying tax on the car allowance too, so you've got nothing like £560 a month to spend. Unless that is the figure after tax?

Before looking any further, this is rather a crucial point that needs to be clarified as it will make a big difference at 40% tax

[plfrench]

Matt UK said:

clarkey said:

You'll be paying tax on the car allowance too, so you've got nothing like £560 a month to spend. Unless that is the figure after tax?

Before looking any further, this is rather a crucial point that needs to be clarified as it will make a big difference at 40% tax

In addition to this, the 14ppm (and indeed any government top-up) is only for business mileage. If you are paid for mileage covered commuting to and from a permanent place of work and private use you will be taxed on this too in the same way you are if you have a fuel card.

I'm not always convinced about opting out...

[hadenough!]

Matt UK said:

clarkey said:

You'll be paying tax on the car allowance too, so you've got nothing like £560 a month to spend. Unless that is the figure after tax?

Before looking any further, this is rather a crucial point that needs to be clarified as it will make a big difference at 40% tax

Beat me to it.

[edo]

Fume troll said:

Maybe a stupid question, but do you have to spend it all on a car? Any car allowances I've had have been treated as income anyway.

Cheers,

FT.

No. A car allowance is just like the rest of your salary.

consider that some companies stipulate types of car allowed/not allowed to be used for company business, age of car etc. Check this too.

[Big Rod]

randlemarcus said:

Don't forget you can claim the difference between the 0.14 and the HMRC rate of 45p per mile up to 10000 back from the gubbermint.

Actually, sometimes you can't, (or at least aren't supposed to!).

It depends on how the company that manages the allowance works, if there is one and it's not coming directly from your company.

OP, you don't happen to work for Siemens do you?

[Frimley111R]

If you are a 40% tax payer is the money then taxed at 40%? Sorry it sounds a bit of a daft question but I need to know as SWMBO is in the same boat and I am trying to work out how much we will have to spend.

[Mr_S]

I had forgotten about the tax

I earn just under £38K so I guess this will be taxed at 40%, damn

Passat or Insignia are out of the question then.

[BeeRoad]

Something like this:

http://www.newcar4me.com/New_Car_PCP-SKODA-OCTAVIA...

It will be new and probably nicer to drive than an Insignia or Passat.

[robsti]

Mr_S said:

I had forgotten about the tax

I earn just under £38K so I guess this will be taxed at 40%, damn

Passat or Insignia are out of the question then.

Full maintanance lease!

[AllNines]

Mr_S said:

I had forgotten about the tax

I earn just under £38K so I guess this will be taxed at 40%, damn

Passat or Insignia are out of the question then.

38000 + 6700 isn't going to mean paying 40% on the lot, as the threshhold is about 44 isn't it?? So I wouldn't worry about that.