Cash Allowance to Company Car - Net pay Decrease ?

[Driver5]

Hello,

Just a quick question which i'm struggling to understand and would appreciate it explaining please.

At present I take a company car cash allowance but i am wanting to now take a car but trying to work out the impact of my net pay per month if i do so.

The part im trying to work out is :-

At present I get £340 pm car allowance
After tax is £204 take home. (£136 reduction)

If I take a car im trying to work out what the overall effect on my net pay each month will be.

As a random example we will choose:

VAUXHALL INSIGNIA DIESEL HATCHBACK 2.0 CDTi [140] ecoFLEX SRi Vx-line Nav 5dr [S/S] 15

Taxable List Price: £23694.00

Monthly costs for tax year - 2015 / 2016
Benefit in kind (BIK cost) - £125.87 pm
Private Usage Contribution - £21.00 pm
Company Car Cost total - £146.87 pm


For working out how much my wage will be "down" per month, is it simply £204 (car after tax) + £146.87 CCC = £350.87 down a month ?

Or... does the £136 tax which i normally pay on the cash allowance get added back "somewhere/how" therefore reducing the monthly impact ?


Thanks for reading

[f1nn]

You will lose the allowance, and have to pay the BIK tax.

[f1nn]

But obviously, insurance, repairs etc are then the companies problem, so it may not be as black as white as the figures above.

[anonymous-user]

http://fleetworld.co.uk/newcar/companycar/cashorca...

[Sheepshanks]

Driver5 said:

For working out how much my wage will be "down" per month, is it simply £204 (car after tax) + £146.87 CCC = £350.87 down a month ?

Yes.

But as pointed out above, there will be upside - ie no insurance etc. Peace of mind of not being responsible for the car is quite valuable. Does the private use contribution cover private fuel?

[Driver5]

thanks all for confirming. :-) Car will be fully maintained and insured.

I dont get any private fuel and I dont do any business mileage.

Thank you

[Paul O]

Driver5 said:

Hello,

Just a quick question which i'm struggling to understand and would appreciate it explaining please.

At present I take a company car cash allowance but i am wanting to now take a car but trying to work out the impact of my net pay per month if i do so.

The part im trying to work out is :-

At present I get £340 pm car allowance
After tax is £204 take home. (£136 reduction)

If I take a car im trying to work out what the overall effect on my net pay each month will be.

As a random example we will choose:

VAUXHALL INSIGNIA DIESEL HATCHBACK 2.0 CDTi [140] ecoFLEX SRi Vx-line Nav 5dr [S/S] 15

Taxable List Price: £23694.00

Monthly costs for tax year - 2015 / 2016
Benefit in kind (BIK cost) - £125.87 pm
Private Usage Contribution - £21.00 pm
Company Car Cost total - £146.87 pm


For working out how much my wage will be "down" per month, is it simply £204 (car after tax) + £146.87 CCC = £350.87 down a month ?

Or... does the £136 tax which i normally pay on the cash allowance get added back "somewhere/how" therefore reducing the monthly impact ?


Thanks for reading

So cost to you is £204+£146. So it will cost you £350 a month from what you are used to presently.

[blank]

Don't you pay NI on the car allowance too?

[Pints]

I can't quite figure it out from your post but if your company is anything like mine, if your chosen CC is less than your allowance you get the difference paid as part of your salary (which is of course taxed according to your tax band).
Because I've only chosen a little MINI, the cash back helps offset the BIK and pay for a bit of fuel.

[Driver5]

Pints - thanks - the PUC is £21, so thats putting £21 extra towards from my pocket rather taking a smaller car and getting cash back .

Thanks PaulO

The part i got confused myself over is the element of tax i already pay from the car allowance, (£340 = £204 after tax) so £136 tax paid.

If its as simple to work out take home pay is £204 (which i would of got) + £XX for PUC + £XX BIK

Thanks

[Sheepshanks]

The irritating thing is the Taxable List Price of £23694.00 for (take a deep breath) VAUXHALL INSIGNIA DIESEL HATCHBACK 2.0 CDTi [140] ecoFLEX SRi Vx-line Nav 5dr .

[Driver5]

Sheepshanks said:

The irritating thing is the Taxable List Price of £23694.00 for (take a deep breath) VAUXHALL INSIGNIA DIESEL HATCHBACK 2.0 CDTi [140] ecoFLEX SRi Vx-line Nav 5dr .

yeah - that was just an example :-) - bet you can pick that car up for £18k new.

[loskie]

Which is one good reason to look at "business edition" models such as the V60 Business Edition. Similar spec to the SE but lower list price and lesser discounts to be had.

[soxboy]

What's the £21 Private User Contribution? I've not come across that before.

The car allowance you have seems pretty meagre to me, I'd be going for the company car as long as it's good on BIK. The fact that everything is paid for re maintenance and insurance is a big bonus.

There's a very good deal on Alfa Giulietta Business edition at the moment, list price less than lower models.

I had quite a few Vauxhalls on my co car list. Co2 was poor and list prices quite high so got high BIK - Astra estate was £28k list!!

[Defcon5]

It will cost him £350 a month for a diesel insignia?

Aren't half this forum leasing golf Rs for £200 a month?

[Countdown]

Defcon5 said:

It will cost him £350 a month for a diesel insignia?

Aren't half this forum leasing golf Rs for £200 a month?

I think OP used that as a random example. I'm fairly sure C-Class or 3-series can be leased for £350.

[Driver5]

Countdown said:

I think OP used that as a random example. I'm fairly sure C-Class or 3-series can be leased for £350.

Yes - random example - 320d SE Business can be had for not much more.

[Sheepshanks]

soxboy said:

What's the £21 Private User Contribution? I've not come across that before.

He said earlier it was to allow him to have a bigger car.

We used to pay it too, but in our case it covered private fuel, and it wiped out the fuel element of the BIK charge.

soxboy said:

There's a very good deal on Alfa Giulietta Business edition at the moment, list price less than lower models.

I always thought if there was an Alfa on our list I'd have it. Great chance to use a car that you wouldn't dream of buying with your own money.

[RammyMP]

Remember to include your tax relief allowance, 45p for the first 10,000. My car allowance is paid though the tax allowance. My allowance is £300 a month but with doing about 1000 business miles a month I get it paid tax free. So if I went back to a company car I will be £400 a month worse off.

If you do no business miles the company car might be better?

[TwigtheWonderkid]

Driver5 said:

yeah - that was just an example :-) - bet you can pick that car up for £18k new.

I doesn't matter how much you pay for the car, the BIK is based on the manufacturer's list price.