Company car - Actual cost in tax?

[FreeLitres]

How much does it actually cost to run a company car????

I seemed to think it was around £4k per year in tax, but the company car calculators I have seen seem to suggest closer to £1k per year for a diesel rep-mobile.

If you have a company car, exactly how much comes out of your wages for the privilege?

[2 sMoKiN bArReLs]

If you pax tax @ 40% it's twice as much as if you pay tax @20%

(so what I'm saying is depends on yer circumstances)

[FreeLitres]

OK - an example.

Skoda Octavia Estate 1.6 tdi Greenline 105PS

Comcar website says:
Tax year to 5th April 2011/12
P11D value £19,150
Percentage charge 13%
Benefit in kind £2,490
Tax payable at 20% £498

So as a 20% tax payer, does that mean that only £498 will be taken out of my wages for a year of motoring of 30k miles a year? Or, are there extra costs I need to consider?

[lesstatt]

I have a insignia elite 160 nav, its about £75 a month cost to me. list is 28K, but its good on emissions so tax is low

[2 sMoKiN bArReLs]

FreeLitres said:

OK - an example.

Skoda Octavia Estate 1.6 tdi Greenline 105PS

Comcar website says:
Tax year to 5th April 2011/12
P11D value £19,150
Percentage charge 13%
Benefit in kind £2,490
Tax payable at 20% £498

So as a 20% tax payer, does that mean that only £498 will be taken out of my wages for a year of motoring of 30k miles a year? Or, are there extra costs I need to consider?

+ some if you get free fuel

[FreeLitres]

I was convinced it was costing me about £4k a year to have a company car in my first job.

How are the fuel costs calculated? Do you only pay tax on private miles?

[lesstatt]

FreeLitres said:

I was convinced it was costing me about £4k a year to have a company car in my first job.

How are the fuel costs calculated? Do you only pay tax on private miles?

I pay all private fuel so no benefit in kind, nothing to pay tax wise

[rocky79]

If you count your car allowance on top of the tax then 4k for a run of the mill rep mobile probably isnt far off. £450 car allowance for a reasonable insignia + 500/700 tax for the year (if lower rate).

Though that 450 becomes 300 if you take the cash, so depending on what you would buy and what you can get on the scheme including tyres, maint insurance, tax etc, it can go either way on buying or going through the schemes. Usually depends on the number of miles you are doing, mpg, if you take a fuel card.

People spend days working on spreadsheets with company car vs equivialnt car leased, vs something silly with 2 doors that the company or wife isnt going to let you keep anyway... they normally end up with a 2.0 TDI golf

[2 sMoKiN bArReLs]

FreeLitres said:

I was convinced it was costing me about £4k a year to have a company car in my first job.

How are the fuel costs calculated? Do you only pay tax on private miles?

In theory, if you get 1 private mile or 100,000 private miles you pay the same scale charge. It too is based on the emissions.

[rocky79]

edit - reasonable insignia

[rocky79]

I think there is a limit though to the taxable benefit on the fuel payments (might be wrong), seem to remeber it being around 3k, so if you spend over that in a year on private fuel it was worth taking the fuel card. Though if you then get paid pence per mile on top of your allowance, sometimes you can pay for your private fule and not have to have to worry about tax on a fuel card. Again depends on circumstances!

[2 sMoKiN bArReLs]

rocky79 said:

I think there is a limit though to the taxable benefit on the fuel payments (might be wrong), seem to remeber it being around 3k, so if you spend over that in a year on private fuel it was worth taking the fuel card. Though if you then get paid pence per mile on top of your allowance, sometimes you can pay for your private fule and not have to have to worry about tax on a fuel card. Again depends on circumstances!

it's a scale charge based on the car's emissions. £18,800 x BIK %

Edited by 2 sMoKiN bArReLs on Monday 23 January 21:23

[YeahYeahWhatever]

rocky79 said:

If you count your car allowance on top of the tax then 4k for a run of the mill rep mobile probably isnt far off. £450 car allowance for a reasonable insignia + 500/700 tax for the year (if lower rate).

Though that 450 becomes 300 if you take the cash, so depending on what you would buy and what you can get on the scheme including tyres, maint insurance, tax etc, it can go either way on buying or going through the schemes. Usually depends on the number of miles you are doing, mpg, if you take a fuel card.

People spend days working on spreadsheets with company car vs equivialnt car leased, vs something silly with 2 doors that the company or wife isnt going to let you keep anyway... they normally end up with a 2.0 TDI golf

So let wifey enjoy the Golf and then use hire cars for work. Obviously only works for occasional users and where the car is a 'perk' and not a necessity. Also need to make room in the garage for 2 doors and a soft top..

[cpas]

FreeLitres said:

OK - an example.

Skoda Octavia Estate 1.6 tdi Greenline 105PS

Comcar website says:
Tax year to 5th April 2011/12
P11D value £19,150
Percentage charge 13%
Benefit in kind £2,490
Tax payable at 20% £498

So as a 20% tax payer, does that mean that only £498 will be taken out of my wages for a year of motoring of 30k miles a year? Or, are there extra costs I need to consider?

Yes, exactly right. The 13% figure depends on the CO2 emissions (and therefore banding - A,B,C etc) which is available on the internet (and also on the manufacturers' websites). Mileage used to be taken into account but is not any more. Fuel is done on the same percentage figure but with a nominal value for all cars of around £18k.

[Deva Link]

cpas said:

FreeLitres said:

OK - an example.

Skoda Octavia Estate 1.6 tdi Greenline 105PS

Comcar website says:
Tax year to 5th April 2011/12
P11D value £19,150
Percentage charge 13%
Benefit in kind £2,490
Tax payable at 20% £498

So as a 20% tax payer, does that mean that only £498 will be taken out of my wages for a year of motoring of 30k miles a year? Or, are there extra costs I need to consider?

.
Yes, exactly right. The 13% figure depends on the CO2 emissions (and therefore banding - A,B,C etc) which is available on the internet (and also on the manufacturers' websites). Mileage used to be taken into account but is not any more. Fuel is done on the same percentage figure but with a nominal value for all cars of around £18k.

I see that car as a CO2 rating of 114. Bear in mind that means the 2012/13 charge jumps to 16%, and 17% the year after.

Having said that, for 20% tax payers, taking a company car is a no-brainer

Edited by Deva Link on Tuesday 24th January 20:49

[texasjohn]

It becomes a no brainer if you are doing lots of miles (25-30k a year and up).

4 or 6 tyres a year (this can add up particularly on something like 19" runflats - although I do recognise 30k miles a year and 19" runflats isn't probably the most enjoyable combination!)

additional insurance loading for doing that kind of mileage

one or two services.

All adds up, particularly if you are comparing a personal lease vs company car (as the lease rates are more expensive with higher annual mileages)

If you're on 40% tax and your cash in lieu of car allowance is £400 a month then you only see a couple of hundred after tax (but then of course your BIK tax is twice as much too if you have a company car instead of taking that cash).

Need to work it all out based on your personal situation really.

Some of the new petrols are pretty nippy and good on tax though, new 328i, TT TFSI spring to mind.

Edited by texasjohn on Tuesday 24th January 20:48

[Deva Link]

texasjohn said:

It becomes a no brainer if you are doing lots of miles (25-30k a year and up).

It's always a no-brainer for people on 20% tax. Look at the OP's example - that car would cost him £10/wk. If you live in an even slightly dodgy place your insurance on its own would cost more than that.

[texasjohn]

Deva Link said:

texasjohn said:

It becomes a no brainer if you are doing lots of miles (25-30k a year and up).

It's always a no-brainer for people on 20% tax. Look at the OP's example - that car would cost him £10/wk. If you live in an even slightly dodgy place your insurance on its own would cost more than that.

Absolutely.

[Deva Link]

swerni said:

On the car maybe but not on the fuel

No, it's on the fuel too, if private fuel is provided. In my last company there was no option to refuse private fuel as it suited a lot of the office based people who had long commutes.

[XDA]

Yep, my Golf company car costs me £43 a month or just over £500 per year. I have a fuel card but pay for all private mileage myself. I'm a 20% tax payer.

I couldn't buy/lease, insure, service (at main stealers), buy tyres, tax and get full breakdown cover on a £23k Golf for only £516 a year if I did it myself!

As said, it's a no brainer!