Company Car allowance

[Rick Cutler]

Right so here we go, Bought a 2006 Range Rover Vouge last October and love the car. Just been offered a job with a £400 car allowance but the RR is not suitable (Image and age) despite private plate???).

We have parking for two cars and the misses has a MX5, we live down a narrow lane and a 4x4 would be good as the mazda is the summer car really.

What would people suggest company has suggested around 2-3 year old cars only.

Range Rover could be sold as don't really need two private cars for me! However if RR is replaced car must come up to similar spec. ie. Leather, Bluetooth, DAB, SAT NAV, TV would be nice! but doubtful. Heated seats at front and split zone zircon, auto wipers lights etc. And be big we have a Malamute Husky and the misses and me go camping with the dog!

Just typical to get this offer months after buying the RR and spending £££ getting it sorted!

Thanks in advance.

[Pesty]

We have a similar policy of 3 year old cars. I lost thousands in depreciation before I noticed nobody else stuck to it. The boss drives a 2005. So see if you can get away with it.
have you thought about private plate?

[Rick Cutler]

Pesty said:

We have a similar policy of 3 year old cars. I lost thousands in depreciation before I noticed nobody else stuck to it. The boss drives a 2005. So see if you can get away with it.
have you thought about private plate?

It has one!!! I think really its an image thing as the boss has ordered and Evouque.

[Pesty]

Doh sorry

[Condi]

Is that £400 before or after tax?

Also as suggested, ignore it? I was told by 'fleet management' (an external company) our cars had to be less than 8 years old. Asked HR and they knew nothing about it and told me I could run whatever. Currently buzzing around in a 1998 A4 costing less than 4 months car allowance. Nice....

[Pesty]

Good point before or after tax. Plus what fuel allowance do you get.

if you want t be sensible a 2011/12 508 or insignia

[Northernchimp]

Decent image, inoffensive, nice place to sit...

http://www.autotrader.co.uk/classified/advert/2014...

[Rick Cutler]

I will get 14p per mile and i have to presume its inclusive of VAT but that will be confirmed.

[Motorrad]

Unless they want to see the log book or are car nerds how are they to know?

I drove around in 8yr old BMW until I left the scheme.

[Contigo]

14p per mile! Tell them to stuff it, nowhere near the running costs! We get 45p/mile and that is still pushing it if I take the M5

[Pesty]

Rick Cutler said:

I will get 14p per mile and i have to presume its inclusive of VAT but that will be confirmed.

I get 550 plus 45p 10 k miles then 25p thereafter. And These days that just about covers it but not by much. I used to make money.

I assume you don't want to loose much cash on this in depreciation as it's a work car so buy something for 8 to 9 k

Focus, or those Mitsubishi focus sized things.( they are cheap)

You can get a 10 plate Peugeot 508 estate 1.6 diesel that will do 50 mpg. Pretty nice place to be and cheep to run. Boring but exciting costs money.


How many miles a year for work is probably your biggest factor.

Remember depreciation is going to hit hard

But more expensive honda crv nissan x trail for the dog etc etc.

X trail 'teckna 'has all the toy you mention but not amazing mpg

Edited by Pesty on Tuesday 18th February 19:42

[andy-xr]

Tell them to give you the pool car and a fuel card or a guarantee that they'll keep you in your job as long as you have the lease of a new car, or they take over the lease if they let you go

[b0rk]

The car allowance is taxed income so doesn't effect HMRC milage rates. Assuming no fuel card claim the difference between your company rate and HMRC on your self assessment. Obviously this means you'll have wait until the end of the tax year to recover the difference or flat out ask your employer why they do not pay HMRC rates.

[Pistom]

Wow, some organisations take the piss. That really is not a great deal of money but nor is it realistic to expect them to foot the bill of a luxo barge. I notice the OP isn't asking that.

In fact OP is being really pragmatic.

Insignia, Mondeo or Passat are worth considering as they are OK places to be. Be careful if looking at an Eco petrol as some can be stty like the 1.8 Insignia which just seems to rely on the wind moving it as the engine and transmission appear to have little effect on forward motion.

This change may save you from much future grief with the RR so look on the bright side.

Edited by Pistom on Wednesday 19th February 01:25

[Rick Cutler]

b0rk said:

The car allowance is taxed income so doesn't effect HMRC milage rates. Assuming no fuel card claim the difference between your company rate and HMRC on your self assessment. Obviously this means you'll have wait until the end of the tax year to recover the difference or flat out ask your employer why they do not pay HMRC rates.

Thanks for that!! That's worth a lot of money over the year!!!

[oyster]

Rick Cutler said:

b0rk said:

The car allowance is taxed income so doesn't effect HMRC milage rates. Assuming no fuel card claim the difference between your company rate and HMRC on your self assessment. Obviously this means you'll have wait until the end of the tax year to recover the difference or flat out ask your employer why they do not pay HMRC rates.

Thanks for that!! That's worth a lot of money over the year!!!

Nonetheless, I'd tell the company to come back with a better offer.

Assuming you're a higher rate taxpayer then your car allowance will be worth only £2,784 a year, and with tax rebate you'll then get another 26.4p per mile up to 10k miles.

Is that enough to buy/lease and run a sub 3 year old car? I highly doubt it.



To compare, I know of many people with car schemes where they have a £600/700 a month allowance with 45p a mile.

[anonymous-user]

oyster said:

To compare, I know of many people with car schemes where they have a £600/700 a month allowance with 45p a mile.

fk me! Do they have any jobs going!?!?

[northwest monkey]

Motorrad said:

Unless they want to see the log book or are car nerds how are they to know?

I drove around in 8yr old BMW until I left the scheme.

Lots of companies want to see your insurance details to make sure you have the correct cover - mine did some years ago.

14p per mile is st though. I was on £500pm and 45ppm business mileage 12 years ago with no major restrictions in place.

[simo1863]

Rick Cutler said:

Thanks for that!! That's worth a lot of money over the year!!!

Bit off topic but if you're going to be doing a lot of business miles then look up 'mileage allowance relief' on the HMRC website.

It allows you to submit a tax return claiming tax relief for every business mile (on 45 pence per mile for the first 10k and then 25 pence per mile for everything thereafter, minus your 14 pence of course). If you're doing 15k+ it might just pay for a holiday or something but if you look to do it every year then the Inland Revenue will just adjust your tax code eventually (still beneficial though).

[theboss]

Rick Cutler said:

b0rk said:

The car allowance is taxed income so doesn't effect HMRC milage rates. Assuming no fuel card claim the difference between your company rate and HMRC on your self assessment. Obviously this means you'll have wait until the end of the tax year to recover the difference or flat out ask your employer why they do not pay HMRC rates.

Thanks for that!! That's worth a lot of money over the year!!!

To clarify, you can claim tax relief on the difference between the company and HMRC approved mileage rate (£0.45 for 10K, then £0.25), not the difference itself literally. I'm not sure if that's what b0rk was implying but I have seen it stated here enough times to know it's a common misconception. Think about it - this being the case every company in the land would reimburse mileage in private vehicles at £0.00 per mile and let HMRC pick up the bill.

So if you do 15k business miles and receive £0.14/mile (£2100) from your employer, you can reduce your taxable income by £2650. That equates to a tax refund of £730 at the basic rate or £1460 at the higher rate.

It's handy to know about but don't be too optimistic - it will serve to merely reduce the rate at which you are personally subsidising your business travel, not send you off on a fancy holiday...

Edited by theboss on Wednesday 19th February 14:58