Best way to obtain company car.
Discussion
My wife has recently accepted a job of which there will be a company car as part of her contract.
The finer details haven't been sorted but there will be the option of having an allowance or for them to supply it.
Is there a preferable option to choose from?
Naturally I want to have as much choice as possible as let's face it, choosing a car is fun! Hoever I can also see the benefit in letting the company deal with it all.
The finer details haven't been sorted but there will be the option of having an allowance or for them to supply it.
Is there a preferable option to choose from?
Naturally I want to have as much choice as possible as let's face it, choosing a car is fun! Hoever I can also see the benefit in letting the company deal with it all.
She pays tax on both too don't forget. The cash would be taxed as part of her salary, the car is taxed and the CO rate so something like a Golf Bluemotion isn't very much but you still pay a monthly figure on it.
You need her to get the list from work on what is allowed and how much the extra's are.
You need her to get the list from work on what is allowed and how much the extra's are.
Car ownership scheme is best - if the company offers it. Works like a personal lease, but the company picks up all the penalties. No tax liability, either, if the company sets it up right.
In my last job, I had a Mazda 6 TS2 estate, which cost me £56 a month in contributions to the company.
In my last job, I had a Mazda 6 TS2 estate, which cost me £56 a month in contributions to the company.
clockworks said:
Car ownership scheme is best - if the company offers it. Works like a personal lease, but the company picks up all the penalties. No tax liability, either, if the company sets it up right.
In my last job, I had a Mazda 6 TS2 estate, which cost me £56 a month in contributions to the company.
No tax liability? Really? How?In my last job, I had a Mazda 6 TS2 estate, which cost me £56 a month in contributions to the company.
clockworks said:
Car ownership scheme is best - if the company offers it. Works like a personal lease, but the company picks up all the penalties. No tax liability, either, if the company sets it up right.
In my last job, I had a Mazda 6 TS2 estate, which cost me £56 a month in contributions to the company.
Except the car payments become your problem if the company goes bust or you decide to leave, it's a risky bet, especially if the car is on a long lease deal.In my last job, I had a Mazda 6 TS2 estate, which cost me £56 a month in contributions to the company.
In answer to the question, it all depends on the miles you do. Volvo V40 is the best bet tax-wise for something vaguely interesting if you want to minimise tax - you need 94g or less of CO2. Remember the cash allowance is subject to tax, NI and student loan contributions too if applicable.
I would take a company car at the moment, I've had allowances before and they usually come with a stipulation that the car has to be under 3 years old, which means looking at new, which means tying yourself into a lease agreement for 1/3/5 years. Prefer to take the benefit in kind tax than the lease on my shoulders if it all goes pinky ponky
andy-xr said:
I would take a company car at the moment, I've had allowances before and they usually come with a stipulation that the car has to be under 3 years old, which means looking at new, which means tying yourself into a lease agreement for 1/3/5 years. Prefer to take the benefit in kind tax than the lease on my shoulders if it all goes pinky ponky
Depends on the company.The one I work for have no such stipulation on the age of a car you provide it you take the allowance instead of a car - I can take the money and turn up in a 1912 bentley if I want (well, if I could afford a 1912 bentley anyway)
If I do take the car, I'm allowed to pick basically any mainstream vehicle (the company is the leaser, not me) - save a few specials (Lotus is probably the biggest company you're not allowed to buy from - but you are allowed porsche, etc).
If I were to lose my job or decide to leave, the car goes back to the company. No lock-in, and if I lose my job, one of my larger bills disappears.
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CraigyMc said:
I can take the money and turn up in a 1912 bentley if I want (well, if I could afford a 1912 bentley anyway)
I can think of a very good reason why you couldn't. (fwiw, OP: unless your Mrs does a huge mileage and/or would run a new car anyway, take the money. Unless she's got the sort of job where clients see what she drives I doubt her employer will be bothered how old her car is. Mine certainly isn't, but if they suddenly decided they were then I'd probably get something like a Piaggio Ape to spite them)
I get an allowance of £580 (gross) a month or a car with lease value up to £445 a month, now as these have to be fully maintained and through a certain company there is not a lot you can get for that. The car i have personally came in at £560 a month.
I take the cash and we dont have rules on the car we use other than it has to be legal and taxed and insured.
I take the cash and we dont have rules on the car we use other than it has to be legal and taxed and insured.
wolf1 said:
Have you asked the wife? It's her car after all 
This.And remember, if you're a lower rate tax payer and choose a low emissions car such as a Prius, Golf Bluemotion, Focus Econetic etc., then it's a no-brainer, as you can get a pretty decent new car for just 40 quid a month in BIK tax. You'd have to be mad to do anything else.
Bitofbully said:
wolf1 said:
Have you asked the wife? It's her car after all
This.And remember, if you're a lower rate tax payer and choose a low emissions car such as a Prius, Golf Bluemotion, Focus Econetic etc., then it's a no-brainer, as you can get a pretty decent new car for just 40 quid a month in BIK tax. You'd have to be mad to do anything else.
Mileage I would estimate to be in the 15-20k region.
What would cost the company more, paying a £xxx per month allowance or paying £xxx direct to a lease company? If indeed there is any difference to them.
Mercedes lease deals seem quite attractive at the moment from what I can see.
Bitofbully said:
...if you're a lower rate tax payer and choose a low emissions car such as a Prius, Golf Bluemotion, Focus Econetic etc., then it's a no-brainer, as you can get a pretty decent new car for just 40 quid a month in BIK tax. You'd have to be mad to do anything else.
I actually think the opposite about this - not that it's a bad idea to get a company car, but that it makes more sense if you pay more tax anyway.To me, company cars make more sense if you're a higher rate taxpayer because if you're going to get taxed at, say, 40% on your earnings anyway, then choosing a low-emissions band company car can cut part of that tax liability down to say 15% (depends on band).
I think that's why you see lots of BMW 320d's and similar kicking about.
The other option for those people is take the cash, get taxed 40% on it, and have to fund your own car, maintenance, business-class insurance and so on. It also depends on how many miles you do as to which makes sense. Until recently I could easily have put 30K a year on a car, now it would surprise me if I did more than 15K (and a lot of that will be personal mileage anyway).
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TheFungle said:
What would cost the company more, paying a £xxx per month allowance or paying £xxx direct to a lease company? If indeed there is any difference to them.
Paying the allowance will cost the company more.With the car, they are free to do discount deals with the leasing companies (agreed value versus what's actually paid - no company pays list prices, but that's what the employee will be taxed on).
It might be totally different in the PCP scheme you're talking about though. I know from personal experience that companies can get such huge discounts out of the car companies that the car scheme probably pays for itself.
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