Company car or take the money?

[Leftie]

Just checking I have this right??



I was all set to buy a new company car, when on a trip to have a test drive the salesman suggested looking at a personal contract plan, because the APR was only 3.9% and the company are getting 4.75% gross at the bank on the money (it is my company). I would personally pick up the bill for the PCP, the insurance, servicing and fuel and the company would pay me for using it. I have calculated that on 10,000 business miles a year I could break even, bearing in mind what I now pay in company car tax.

Now as I understand it, if I did go for a PCP, and simply charged back my business miles at 40p a mile, it would attract no company car tax for me right?

But I also understand that the company can pay me an additional alowance over and above the 40 a mile or they can also pay me a flat amount and I then just claim the fuel? How much is reasonable and could that be seen as a BiK and be liable to PAYE and NI?

I presume on the PCP that the company would lose the capital allowances (but also not have any depreciation), but have no residual tax burden when the car was sold/handed back, and pay no NI on the BiK? This forms part of my calculations!


I have calculated that on 10,000 business miles a year on this PCP I could break even and be driving my private miles for free, bearing in mind what I now pay in company car tax etc.

[Leftie]

This looks handy;

http://times.cashorcar.co.uk/

calculates the options and ofers various permutations.

[Leftie]

My accountant had sopftware from Ashford Carbonel, did it all for me. Suggests I have it as a personal car, increase my salary by £2680 a year Y1, and £1982 in years 2 and 3 and claim the mileage back. That should save me £1383 year 1 and about £900 in year 2 and 3, overall £3274. Also best for the company.