Company car tax for dummies (me)

[lost in espace]

I have just found out that the OH receives 450 pounds a month on her payslip as a company car allowance. She currently takes this as salary, and we have been running snotters. Having had our second snotter self destruct in 2 years I started to look at the possibility of getting a Skoda Citigo or similar small car with low tax and high mpg, and a warranty.

Now she tells me that she has this allowance, the company cars have to be personally leased however. I don't have a clue what this means in the real world. Am I right in saying she has a contribution of 450 quid which has to pay both the tax and the lease?

She works for a major plc, and is going to have a look on her intranet I just wondered if someone in the know could give me a bit of info.

She is a higher rate tax payer.

[MagicalTrevor]

I have the same setup. I choose to run my own car but we have the option of using the company discounted PCP scheme, which is actually rather competitive at <5% APR.

Some places have decent lease arrangements with companies so you can get a nice leased car at a low rate.

Either way, you can normally get a decent motor for a good price if that suits you.

Because its not actually a 'company car' then you won't get taxed for it.

[robdcfc]

I think as it will be a personal lease and you wife will have already paid income tax on it then you just spend what's left as its not a company car and so not liable for company car tax!

[lost in espace]

Thanks chaps. Rob I think you are correct in your assumption, appreciated.

[DanL]

Would think it's as Rob suggests - I have a similar set up at work. I've never leased a car with the cash though - if they were to let me go I'd be left with having to pay the lease, but without the allowance!