Company Car Q's
Discussion
So I'm in the position of interviewing for a second time with a couple of companies for a role which would in both cases include a healthy increase in income and a company car.
Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
C.A.R. said:
So I'm in the position of interviewing for a second time with a couple of companies for a role which would in both cases include a healthy increase in income and a company car.
Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
I love having a company car!Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
Don't worry about being just into a 40% tax band - the Co Car tax does not suddenly double despite what the figures look like in the comparison tables. Negotiate as high a wage as you can!
For me, the company car tax covers ALL costs associated with the car except fuel. So, tyres, repairs, insurance - all included.
For fuel, I pay to fill the car with diesel and then I claim back the number of miles fro the company. The "fuel only" rates are on the HMRC website. For a 2.0 TDi, its currently 13 pence per mile which just about covered the fuel used.
There are a few ways the company could operate the company car scheme - fuel included or not, etc.
Note, you will probably end up with a diesel repmobile to save you a load of tax. If you can live with that, go for it!
ETA: for private use, I'm allowed to use the car as much as I like. Of course I can not claim the mileage back for non-work miles so I end up just paying for the fuel on to of the company car tax. Very cheap motoring considering its in a brand new car!
Edited by FreeLitres on Tuesday 24th February 23:12
C.A.R. said:
So I'm in the position of interviewing for a second time with a couple of companies for a role which would in both cases include a healthy increase in income and a company car.
Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
HI, I get asked this all the time by my customers (end user drivers and their employers)Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
When it comes to company car usage there are 2 elements:
BIK - unavoidable
Fuel Benefit - avoidable
BIK - This is the value attached by HMRC to the benefit you receive of any given vehicle provided to you as a part of your salary
Fuel Benefit - If you receive a fully expensed vehicle (inc Fuel) then HMRC see this as an additional benefit against which they will tax you.
unless you do alot of personal mileage then it is entirely cost ineffective to have a fully expensed company car, just ask to have it without the fuel benefit.
Your employer will then need to be able to account to HMRC to PROVE you are not receiving any personal fuel benefit (difficult to do without an effective vehicle tracking and trip-logging solution)
To answer your specific questions:
You can use the car for any private use - trips abroad may require permission from the leasing company
Insurance will be most likely paid for by your employer and cover private usage
Servicing will be paid for by your employer
Tyres/Consumables are also covered
The temptation when being offered a company car is to have fun and get your dream car (within the set budget) but to minimise your tax exposure you need to consider the p11d value of the vehicle and its CO2 emissions. Keep the CO2 as low as possible, def under 120g/km and ideally under 110, under 100 is even better.
There is a nifty thing on the Parkers website which lets you select a vehicle and it will tell you your personal tax exposure.
An example is as follows:
Basic VW Golf 1.6TDI BMT
CO2 = 85g/km
P11d = £21,615
BIK (40%) = £101
Vauxhall Astra 1.6CDTi
CO2 = 104g/km
P11d = £18,275
BIK (40%) =£97
So you can see that a car worth considerably more (the Golf) will only cost you £4/month more because it has a lower CO2 output
Hope this helps
C.A.R. said:
So I'm in the position of interviewing for a second time with a couple of companies for a role which would in both cases include a healthy increase in income and a company car.
Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
HI, I get asked this all the time by my customers (end user drivers and their employers)Until this point, I have never had anything more than than a hire car for a couple of days, so I'm both excited and confused by this prospect!
I've had a Google and I'm still a little lost. I've read the government information site and a couple of articles on Parkers.
The salary will be negotiated, but I understand that anywhere above circa £32k this will accumulate a higher rate of tax (40%) so would it be worthwhile trying to ensure I fall below this (in case I am offered slightly above the threshold?
What private use of the car will I have?
Who pays the insurance? And does this policy cover any private use?
Who pays the servicing?
The tyres / consumables?
I'm really sorry if any of this seems really dim - it probably will to me in the morning when I read it back! But I need to do a lot of learning in a short space of time to make sure I make thr right choices and negotiate the best package...
When it comes to company car usage there are 2 elements:
BIK - unavoidable
Fuel Benefit - avoidable
BIK - This is the value attached by HMRC to the benefit you receive of any given vehicle provided to you as a part of your salary
Fuel Benefit - If you receive a fully expensed vehicle (inc Fuel) then HMRC see this as an additional benefit against which they will tax you.
unless you do alot of personal mileage then it is entirely cost ineffective to have a fully expensed company car, just ask to have it without the fuel benefit.
Your employer will then need to be able to account to HMRC to PROVE you are not receiving any personal fuel benefit (difficult to do without an effective vehicle tracking and trip-logging solution)
To answer your specific questions:
You can use the car for any private use - trips abroad may require permission from the leasing company
Insurance will be most likely paid for by your employer and cover private usage
Servicing will be paid for by your employer
Tyres/Consumables are also covered
The temptation when being offered a company car is to have fun and get your dream car (within the set budget) but to minimise your tax exposure you need to consider the p11d value of the vehicle and its CO2 emissions. Keep the CO2 as low as possible, def under 120g/km and ideally under 110, under 100 is even better.
There is a nifty thing on the Parkers website which lets you select a vehicle and it will tell you your personal tax exposure.
An example is as follows:
Basic VW Golf 1.6TDI BMT
CO2 = 85g/km
P11d = £21,615
BIK (40%) = £101
Vauxhall Astra 1.6CDTi
CO2 = 104g/km
P11d = £18,275
BIK (40%) =£97
So you can see that a car worth considerably more (the Golf) will only cost you £4/month more because it has a lower CO2 output
Hope this helps
Thanks, that is a massive help. The guid on Parkers should be simplified into the above, because the format it is written in is much more complicated!
I was looking at examples and the only suggestion I've had so far was that it would be a "Mondeo or Volvo of some description" (said during an interview) so I'm not paying too much attention to the specifics, but it is important for me to at least be a little bit clued-up before sitting my second interview, which I'm hoping will be more of a negotiation for a position (fingers crossed!)
Many, many thanks again.
I was looking at examples and the only suggestion I've had so far was that it would be a "Mondeo or Volvo of some description" (said during an interview) so I'm not paying too much attention to the specifics, but it is important for me to at least be a little bit clued-up before sitting my second interview, which I'm hoping will be more of a negotiation for a position (fingers crossed!)
Many, many thanks again.
C.A.R. said:
"Mondeo or Volvo of some description" (said during an interview)
I love how vague interviewers are when talking about company cars! Years ago I had a boss who used to tell people they'd be getting an Omega (pretty flash in its day for a sales rep).When they turned up on their first day and went outside to find a Cavalier they were usually quite disappointed!
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