Salary in lieu of company car...
Discussion
Hi,
This is a bit of a boring topic I know! I've searched the forums for any previous postings about it but my head is spinning so much now I don't know where I am...
I work for a small buisness and currently have a company car. The car is 1.4L Ford Focus on a 54 plate, that was bought with 11,000 miles on the clock in November 2005 and I think it cost £7000+VAT to buy (I'm not sure about this though). I drive around 12,000 work miles and 5,000 private miles annually. All fuel has is paid for by my employer.
If I run my own car the business will pay me the Inland Revenue rates of 40p/mile for 10,000 miles and 25p/mile after that, and I'll be expected to cover all running costs.
My question is: how should I calculate what the private use of the company car worth at the moment, and what salary adjustment should I expect in lieu of losing the company car? Should this be an absolute value or a percentage of my current salary?
I've been searching all over the web and my head is spinning now! I hope it's not a silly question!
Ed
This is a bit of a boring topic I know! I've searched the forums for any previous postings about it but my head is spinning so much now I don't know where I am...
I work for a small buisness and currently have a company car. The car is 1.4L Ford Focus on a 54 plate, that was bought with 11,000 miles on the clock in November 2005 and I think it cost £7000+VAT to buy (I'm not sure about this though). I drive around 12,000 work miles and 5,000 private miles annually. All fuel has is paid for by my employer.
If I run my own car the business will pay me the Inland Revenue rates of 40p/mile for 10,000 miles and 25p/mile after that, and I'll be expected to cover all running costs.
My question is: how should I calculate what the private use of the company car worth at the moment, and what salary adjustment should I expect in lieu of losing the company car? Should this be an absolute value or a percentage of my current salary?
I've been searching all over the web and my head is spinning now! I hope it's not a silly question!
Ed
Eric Mc said:
The important details you need for your car are -
the List Price when it was new (including the list price of any accessories fitted).
the Carbon Emmissions rating for that specific model of Fiesta.
Cheers, I've since looked up that information. Parkers website seems to be quite helpful: http://www.parkers.co.uk/cars/company-cars/?deriv=...the List Price when it was new (including the list price of any accessories fitted).
the Carbon Emmissions rating for that specific model of Fiesta.
It seems to me I'm paying tax on the cash equivalent of £2,407 for personal use of the car, and tax on having £2,592 worth of fuel available for personal use. The former is mildly over-valued and the latter is on another planet over-valued (how many people use over £2,500pa in fuel on just personal use?!).
Do you think I am reasonable in asking for £1,500pa in lieu of personal use of the car, plus £600pa in lieu of fuel for personal use (c.5000 miles at 35-40 MPG)?
Thanks again.
If I understand your question I would suggest the following.
Ask for a monthly sum of say circa £300 - £350 per month + fuel at the current rate per mile (40p for the 1st 10k, 25p there after). That should be enough to pay for a similar vehicle with some change.
You have to take into consideration depreciation and servicing of your own vehicle, not simply the purchase cost.
There is then also no BIK to be taken into consideration from your side.
Ask for a monthly sum of say circa £300 - £350 per month + fuel at the current rate per mile (40p for the 1st 10k, 25p there after). That should be enough to pay for a similar vehicle with some change.
You have to take into consideration depreciation and servicing of your own vehicle, not simply the purchase cost.
There is then also no BIK to be taken into consideration from your side.
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