Company Car tax query
Discussion
I’ve asked something similar to this previously in a different , but it was wrapped up with multiple other questions and wasn’t really answered – so hopefully you guys can clear something up for me.
Until August 13th 2018 I was employed by Company A and had a company car, the annual BIK value was £7152 (off the top of my head) and this was in force from 6th April until August 13th and I paid all taxes due under PAYE as you would expect.
As of 14th August I work for Company B, and have a car allowance paid directly which is taxed at sources as you would expect.
My tax free allowance of £11,850 is still reduced by numerous items including around 2,980 (5/12’s of the yearly BIK value) of the car, and this is what I’m confused by.
Surely this means I’m still being taxed on the car even though I don’t have it? If I was paying over 12 months for the car that I had for 5 it would make sense, but I paid for it over the 5 months that I had it.
I’ve been told by HMRC on the phone that if they remove it from the code I will be refunded all of the tax I’ve paid for the benefit which clearly wouldn’t be right as I’d end up paying it back, so I’m happy that it stays for the time being as the last thing I want is to owe them more at the back end of the year – but would you be expecting a rebate after the 2018/19 tax year?
My basic calcs show I paid £119.20 each month in tax for the 5 months that I had the car, and now I’m still paying £85 per month (20% of 2,980/7) so whilst I should have paid £596 this year I will actually have paid £1,191.
Can anybody explain it any more clearly than the lady on the phone did? I'm lost.
Until August 13th 2018 I was employed by Company A and had a company car, the annual BIK value was £7152 (off the top of my head) and this was in force from 6th April until August 13th and I paid all taxes due under PAYE as you would expect.
As of 14th August I work for Company B, and have a car allowance paid directly which is taxed at sources as you would expect.
My tax free allowance of £11,850 is still reduced by numerous items including around 2,980 (5/12’s of the yearly BIK value) of the car, and this is what I’m confused by.
Surely this means I’m still being taxed on the car even though I don’t have it? If I was paying over 12 months for the car that I had for 5 it would make sense, but I paid for it over the 5 months that I had it.
I’ve been told by HMRC on the phone that if they remove it from the code I will be refunded all of the tax I’ve paid for the benefit which clearly wouldn’t be right as I’d end up paying it back, so I’m happy that it stays for the time being as the last thing I want is to owe them more at the back end of the year – but would you be expecting a rebate after the 2018/19 tax year?
My basic calcs show I paid £119.20 each month in tax for the 5 months that I had the car, and now I’m still paying £85 per month (20% of 2,980/7) so whilst I should have paid £596 this year I will actually have paid £1,191.
Can anybody explain it any more clearly than the lady on the phone did? I'm lost.
Thanks for the response, I’m still none the wiser though.
In my limited understanding of the tax world I paid what was due when I actually had the car by virtue of my tax free allowance having 7,152 subtracted from it, so why does it still have 2,980 removed from it if I’d paid my dues? It looks like I’m still paying £80odd extra per month even though I’ve already paid what I owe.
In my limited understanding of the tax world I paid what was due when I actually had the car by virtue of my tax free allowance having 7,152 subtracted from it, so why does it still have 2,980 removed from it if I’d paid my dues? It looks like I’m still paying £80odd extra per month even though I’ve already paid what I owe.
Hi Please follow this link below to a government company car cost calc, notice you can put a to and from date. I suggest you fill out and keep a track on the numbers either ready for your rebate or to watch if any oversite has occurred when they reconcile your information.
Alternatively speak direct to the inland revenue tax query line on 0300 200 3300 they amended my tax code before the PAYE accountant did which was useful. Hope this helps a bit good luck. http://cccfcalculator.hmrc.gov.uk/CCF0.aspx
Alternatively speak direct to the inland revenue tax query line on 0300 200 3300 they amended my tax code before the PAYE accountant did which was useful. Hope this helps a bit good luck. http://cccfcalculator.hmrc.gov.uk/CCF0.aspx
Somebody mentioned to me yesterday that it was probably paid back in emergency tax in my first month at my new job. Whilst my pay was higher than expected I do t think it was high enough to have given me all of the tax back, and my next month was even lower than expected but will check back and see if that was it. Be nice if it is that simple!
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