What would you do?
Discussion
The new roll I'm starting soon comes with a couple of options regarding company transport
First option is a fully maintained company car with a fuel card (basic fiesta/corsa style options)
2nd option is a £4000pa allowance plus 45p per mile ect, use this to buy a few year old corsa for around £4.5k and pocket the extra over the following years (which would come in handy)
3rd option is use the above allowance and buy something I actually want to drive/own, I'm thinking £15k over 4yrs finance would get me a nice 10 plate 250 megane cup
The only stipulation is that the car must be under 7yrs old
First option is a fully maintained company car with a fuel card (basic fiesta/corsa style options)
2nd option is a £4000pa allowance plus 45p per mile ect, use this to buy a few year old corsa for around £4.5k and pocket the extra over the following years (which would come in handy)
3rd option is use the above allowance and buy something I actually want to drive/own, I'm thinking £15k over 4yrs finance would get me a nice 10 plate 250 megane cup
The only stipulation is that the car must be under 7yrs old
That 45 ppm will only be tax free for the first 10,000 miles per annum. Or, more likely the rate your company pays will drop after that distance.
http://www.hmrc.gov.uk/payerti/exb/a-z/m/mileage-e...
If that is 20k business miles plus whatever private mileage you do then that is a lot of time to be sitting in a fairly small car, also it will have a major effect on resale/contract hire payments on a brand new vehicle. If you look at 2-3 year old cars you'll find very small differences in prices between Fiesta/Focus/Mondeo for example because everyone wants a nice small second hand car for the wife/child/grandparents and nobody wants a medium size car.
I never regretted going down the car allowance route, free choice of car, new or second hand (within reason) and no-one to answer to when I road rallied it.
Perhaps the best deal was an 18 month old Audi A4 Avant 1.8T, £7k down on what the previous owner paid Audi for the ex-demonstrator, and £12 down on new list price.
Andy
http://www.hmrc.gov.uk/payerti/exb/a-z/m/mileage-e...
If that is 20k business miles plus whatever private mileage you do then that is a lot of time to be sitting in a fairly small car, also it will have a major effect on resale/contract hire payments on a brand new vehicle. If you look at 2-3 year old cars you'll find very small differences in prices between Fiesta/Focus/Mondeo for example because everyone wants a nice small second hand car for the wife/child/grandparents and nobody wants a medium size car.
I never regretted going down the car allowance route, free choice of car, new or second hand (within reason) and no-one to answer to when I road rallied it.
Perhaps the best deal was an 18 month old Audi A4 Avant 1.8T, £7k down on what the previous owner paid Audi for the ex-demonstrator, and £12 down on new list price.
Andy
hyperblue said:
Is the £4k allowance gross or net? It won't go as far as you think if that's gross!
It would, because you would aslo take into account the savings he made on not paying company car tax + fuel. Quite often they will be more than the tax to consider on the £4k car allowance.OP-How many miles per year will you do?
brianb said:
The only stipulation is that the car must be under 7yrs old
Depending upon the company, it's worth asking how flexible that rule is. I had a similar situation with a company I worked for about 6 years ago and mentioned to my boss that I was thinking of buying an old 944 but it would be a LOT older than the 5-years-old rule they had. He started to pay some careful attention and said that if it was a nice example and I kept it looking good and running reliably then they would be quite happy to waive the rule. They took the view that a good-looking older 'posh' car (their words) was no bad thing for an employee to be seen in. It was all helped by the fact that it was a small company (40-ish people) and the directors were petrolheads.
Oli.
Option 1 - pay tax on the company car based on its emissions and list price value including all options, fuel tax charges are based on 21K * emissions % * tax rate.
use the car tax calculator here
http://comcar.co.uk/newcar/companycar/taxcalc/g1se...
and the fuel tax calculator here:
http://comcar.co.uk/fuel/benefit/
Your tax liability will be around £1150PA so £95 per month based on taxable value of £14,400 and CO2 emissions of 129g/km
Option 2 - £4000 pa is usually added to your salary so divide by 12 and taxed at 20% its £250 per month in your back pocket plus NO car tax so around £ 350 better off than the company car option and you can drive what you want/afford BUT you pay for tyres, servicing, depreciation, fuel etc...
EFA plus you get the allowance for fuel but do your own research.
use the car tax calculator here
http://comcar.co.uk/newcar/companycar/taxcalc/g1se...
and the fuel tax calculator here:
http://comcar.co.uk/fuel/benefit/
Your tax liability will be around £1150PA so £95 per month based on taxable value of £14,400 and CO2 emissions of 129g/km
Option 2 - £4000 pa is usually added to your salary so divide by 12 and taxed at 20% its £250 per month in your back pocket plus NO car tax so around £ 350 better off than the company car option and you can drive what you want/afford BUT you pay for tyres, servicing, depreciation, fuel etc...
EFA plus you get the allowance for fuel but do your own research.
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