Company car/fuel card question
Discussion
Please enlighten someone who has never had a company car or fuel card.
Say you get a job C. £30-35K with a company car (£26K new, diesel, band F):
1/ what sort of income tax are you going to pay for the car?
2/ how does the personal miles side of it work?
(I know this may/will vary between companies, but in general...?)
Thanks!
Say you get a job C. £30-35K with a company car (£26K new, diesel, band F):
1/ what sort of income tax are you going to pay for the car?
2/ how does the personal miles side of it work?
(I know this may/will vary between companies, but in general...?)
Thanks!
Here's an approximate sample from HMRC
Company Car and Car Fuel Benefit Calculator
Glossary
Underline
According to the details you have provided, the results are:
Car benefit charge (2014/2015) £6,500.00
Car fuel benefit charge (2014/2015) £5,425.00
In order to calculate the tax due on company car benefit and company car fuel benefit, the amounts calculated above need to be applied to an employee's other income and tax information.
Without additional information it is not possible to give the actual amounts of tax liability, however the following examples provide an indication of the tax that would be due if the full amount(s) of benefit are charged at the basic (20%) and higher (40%) rates only:
Tax Liability indicator: 20% 40%
Company Car Tax (2014/2015) £1,300.00 £2,600.00
Company Car Fuel Tax (2014/2015) £1,085.00 £2,170.00
Summary of details:
Tax year: 2014/2015
Car availability during relevant tax year: From: 06/04/2014
To: 05/04/2015
Number of days unavailable during the period above: 0
List price (including VAT and accessories): £26000
Employee capital contribution: £
Employee payments made towards private use: £
Date first registered: 1998 onwards
Fuel type: Diesel (D)
Engine capacity: 1401cc to 2000cc
Approved CO2 emissions figure: 145
Does your employer pay for private fuel? Yes
Here is the link :
http://cccfcalculator.hmrc.gov.uk/CCF0.aspx
The taxman will take a standard amount for use of private fuel, which you can adjust as part of your tax return.
Company Car and Car Fuel Benefit Calculator
Glossary
Underline
According to the details you have provided, the results are:
Car benefit charge (2014/2015) £6,500.00
Car fuel benefit charge (2014/2015) £5,425.00
In order to calculate the tax due on company car benefit and company car fuel benefit, the amounts calculated above need to be applied to an employee's other income and tax information.
Without additional information it is not possible to give the actual amounts of tax liability, however the following examples provide an indication of the tax that would be due if the full amount(s) of benefit are charged at the basic (20%) and higher (40%) rates only:
Tax Liability indicator: 20% 40%
Company Car Tax (2014/2015) £1,300.00 £2,600.00
Company Car Fuel Tax (2014/2015) £1,085.00 £2,170.00
Summary of details:
Tax year: 2014/2015
Car availability during relevant tax year: From: 06/04/2014
To: 05/04/2015
Number of days unavailable during the period above: 0
List price (including VAT and accessories): £26000
Employee capital contribution: £
Employee payments made towards private use: £
Date first registered: 1998 onwards
Fuel type: Diesel (D)
Engine capacity: 1401cc to 2000cc
Approved CO2 emissions figure: 145
Does your employer pay for private fuel? Yes
Here is the link :
http://cccfcalculator.hmrc.gov.uk/CCF0.aspx
The taxman will take a standard amount for use of private fuel, which you can adjust as part of your tax return.
The calculators here will work out costs for you: http://comcar.co.uk/newcar/companycar/taxcalc/g1se...
MrTrilby said:
The calculators here will work out costs for you: http://comcar.co.uk/newcar/companycar/taxcalc/g1se...
Thanks. So according to that, I will have to pay £259/pcm extra to get a "free" car and "free" fuel (based on £35K)Doesn't seem like such a bargain......
http://comcar.co.uk/newcar/companycar/income/g1inc...
JumboBeef said:
MrTrilby said:
The calculators here will work out costs for you: http://comcar.co.uk/newcar/companycar/taxcalc/g1se...
Thanks. So according to that, I will have to pay £259/pcm extra to get a "free" car and "free" fuel (based on £35K)Doesn't seem like such a bargain......
http://comcar.co.uk/newcar/companycar/income/g1inc...
My car is £10k more and I'm a higher rate tax payer. My car and fuel have a net cost of £400/month.
A900ss said:
JumboBeef said:
MrTrilby said:
The calculators here will work out costs for you: http://comcar.co.uk/newcar/companycar/taxcalc/g1se...
Thanks. So according to that, I will have to pay £259/pcm extra to get a "free" car and "free" fuel (based on £35K)Doesn't seem like such a bargain......
http://comcar.co.uk/newcar/companycar/income/g1inc...
My car is £10k more and I'm a higher rate tax payer. My car and fuel have a net cost of £400/month.
JumboBeef said:
MrTrilby said:
The calculators here will work out costs for you: http://comcar.co.uk/newcar/companycar/taxcalc/g1se...
Thanks. So according to that, I will have to pay £259/pcm extra to get a "free" car and "free" fuel (based on £35K)Doesn't seem like such a bargain......
http://comcar.co.uk/newcar/companycar/income/g1inc...
Company cars are certainly convenient, but they're not that cheap unless you can keep it all at 20% tax.
It might be cheaper to take a cash alternative (if there is one), or give up the "free" fuel depending on how many business miles you do.
I have a lease car and a fuel card, it works out cheaper for me overall than if I had the same car as a company car, and I don't get any car allowance!
NPI said:
SidJames said:
Car benefit charge (2014/2015) £6,500.00
Car fuel benefit charge (2014/2015) £5,425.00
Tax Liability indicator: 20% 40%
Company Car Tax (2014/2015) £1,300.00 £2,600.00
Company Car Fuel Tax (2014/2015) £1,085.00 £2,170.00
40% border is ~£42k, so the benefit charge takes it up to £41.5k (£35k + £6.5k), so it's pretty much 20% liability on the car (£1,300) and 40% on the fuel (£2,170).
blank said:
It's because the car and fuel taxes put you in the 40% tax bracket.
Only partially - the tax bill would be £400/mth if it was all at 40%blank said:
It might be cheaper to take a cash alternative (if there is one), or give up the "free" fuel depending on how many business miles you do.
Well, more important is how many private miles you do as business mileage would be paid anyway. The perk is the free fuel for private use.Free fuel for private use is pretty rare these days - it generally doesn't make financial sense. That said, it depends on your type of use - if you commute a long way or go to Cornwall every weekend (we had a guy who did that) it could easily be a significant benefit.
Edited by NPI on Monday 28th April 21:13
blank said:
It will be well in to 40% with a fuel card!
40% border is ~£42k, so the benefit charge takes it up to £41.5k (£35k + £6.5k), so it's pretty much 20% liability on the car (£1,300) and 40% on the fuel (£2,170).
Yes, sorry - I was taking the personal allowance off twice! Corrected post above.40% border is ~£42k, so the benefit charge takes it up to £41.5k (£35k + £6.5k), so it's pretty much 20% liability on the car (£1,300) and 40% on the fuel (£2,170).
JumboBeef said:
Thanks. So according to that, I will have to pay £259/pcm extra to get a "free" car and "free" fuel (based on £35K)
Doesn't seem like such a bargain......
I've just offered someone a job with a 5% payrise and a company car as a "job need" based. (He currently doesn't have a company car.) He moaned about the extra tax he would be paying..............so I thought about saying "keep the pay rise, but the car offer is withdrawn"...cheeky fecker!Doesn't seem like such a bargain......
Sorry for bing slightly off topic.
grayze said:
Don't forget to factor in
maintenance, tyres, road fund licence and insurance if your company pays for these. then 260 quid starts to look more like a bargain.
Thismaintenance, tyres, road fund licence and insurance if your company pays for these. then 260 quid starts to look more like a bargain.
I pay tax on car and fuel but do get private miles paid for
My tax therefore is, literally, it
Depreciation, insurance, tax, maintenance, repairs, fuel = all someone else's problem.
It's very low hassle and fixes costs each month
grayze said:
Don't forget to factor in
maintenance, tyres, road fund licence and insurance if your company pays for these. then 260 quid starts to look more like a bargain.
Depends if they offer a car allowance as an alternative. If they offer (say) £300/month as a car allowance, then call that £200 after tax and NI. But you've also not paid the £260/month company car tax so you're effectively £460/month up. Should be able to run a decent car for that, particularly if you can charge mileage.maintenance, tyres, road fund licence and insurance if your company pays for these. then 260 quid starts to look more like a bargain.
Home to base is private mileage, not business.
Muzzer79 said:
This
I pay tax on car and fuel but do get private miles paid for
My tax therefore is, literally, it
Depreciation, insurance, tax, maintenance, repairs, fuel = all someone else's problem.
It's very low hassle and fixes costs each month
Check your tax on your "free" fuel , I've just decided to opt out of the free fuel card system we use , I calculated I needed to do over a thousand miles per month personal to break even.I pay tax on car and fuel but do get private miles paid for
My tax therefore is, literally, it
Depreciation, insurance, tax, maintenance, repairs, fuel = all someone else's problem.
It's very low hassle and fixes costs each month
I was doing nowhere near that.
Keep a mileage log , pay for all fuel now and charge back all business miles to the company at 14ppm as per HMRC .
No tax paid on the free fuel and I'm over £700 pa. better off nett.
Easy decision.
JumboBeef said:
Is home > work classed as private or business miles, particularly as there is more than one place of business (although just one placed classed as a base office)?
Home to office is private.Home to client, other office, meeting, training centre or whatever is normally business, but can get quite complicated based on how often you go there and over what period.
carl_w said:
Depends if they offer a car allowance as an alternative. If they offer (say) £300/month as a car allowance, then call that £200 after tax and NI. But you've also not paid the £260/month company car tax so you're effectively £460/month up. Should be able to run a decent car for that, particularly if you can charge mileage.
Home to base is private mileage, not business.
We (big comapny I worked for at the time) went through this and it's surprisingly complicated.Home to base is private mileage, not business.
The OP is getting a pretty expensive car (and, these days, fairly high CO2) for someone on £30-£35K/yr, and an allowance of £300/th would be terrible (ours was £600 at the base level and went up from there).
For a 20% tax payer, it's generally a no-brainer to take the car. Even at the 40% level for his fuel, it's still only £40/wk - if he's office based and commuting then it's not going to take much to exceed that.
The peace-of-mind benefit of having a company car is massive but hard to put a financial value on.
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