Your Company Car Scheme or your company car allowance detail
Discussion
Hi All,
As a small business owner the subject of company cars is a complex subject to get right in terms of tax / BIK, employee happiness, and of course manageable and suitable costs to the business.
We have a fleet of 4 vans & 6 cars.
I was wondering if anyone would be willing to share details on the company car scheme they operate under and ideally any stipulations, for things like:
1. If allowance, what requirements does the business place on the car spec? mileage payments etc?
2. if company car, what stipulations on private usage / over usage of mileage on lease agreements for example
3. If your business operates a scheme (if you are the owner or employee), which do you find easiest to manage.
Look forward to hearing from anyone with experience in this subject!
Cheers,
Sl0wlane.
As a small business owner the subject of company cars is a complex subject to get right in terms of tax / BIK, employee happiness, and of course manageable and suitable costs to the business.
We have a fleet of 4 vans & 6 cars.
I was wondering if anyone would be willing to share details on the company car scheme they operate under and ideally any stipulations, for things like:
1. If allowance, what requirements does the business place on the car spec? mileage payments etc?
2. if company car, what stipulations on private usage / over usage of mileage on lease agreements for example
3. If your business operates a scheme (if you are the owner or employee), which do you find easiest to manage.
Look forward to hearing from anyone with experience in this subject!
Cheers,
Sl0wlane.
Used to take allowance but did (near when I left) get the option of company car - would have been Prius, Golf Bluemotion or similar.
Car had to be 4/5 door and under 5 years old. Could keep into year 6-7 but reduced allowance payment if you did. Had to show proof of business class 1 insurance and that MOT, servicing kept up to date.
I've worked for clients that have had more stringent rules - often upper limits on CO2 (which keeps it to fairly boring cars), upper limit on mileage, etc.
Current work just pays HMRC rates, no allowance but doesn't stipulate car either.
Car had to be 4/5 door and under 5 years old. Could keep into year 6-7 but reduced allowance payment if you did. Had to show proof of business class 1 insurance and that MOT, servicing kept up to date.
I've worked for clients that have had more stringent rules - often upper limits on CO2 (which keeps it to fairly boring cars), upper limit on mileage, etc.
Current work just pays HMRC rates, no allowance but doesn't stipulate car either.
Choice of company car or allowance
4 bands depending on grade
All business mileage has to be logged via an online portal with a 6th of the month deadline for the previous month's entries to be completed.
Company car:
Choice list includes BMW, VAG and Ford.
Cars replaced every 3 years.
AllStar fuel card is provided by the company for all fuel and oil purchases
Employee is required to submit breakdown of all business mileage on a monthly basis, via an online portal, including a closing odometer reading. The system sense checks claimed distances against postcodes, and requires the employee to justify any claim outside a reasonable tolerance.
Based on the above, the system subtracts the business mileage for the month from the total mileage covered. The difference is deemed to be private mileage, and is charged at 12p a mile to the employee. This is a highly automated process. All the employee has to do is provide the business mileage and closing odo reading.
The employee can, if they wish "upgrade" the car to the next grade/band by paying a monthly charge out of your salary (I think it's £70) but this can only be done at the time of ordering a new car.
Allowance:
Again, banded depending on job grade
Very flexible on car choice / age / type. Vague rules about the car being "appropriate" for business use and "presentable", but no real criteria given for this. Absolutely no limits on engine size / CO2 etc. One guy is running a 12 year old Audi A4 and they are still paying him £540 a month!
You can use up to two cars for business use, but each must be registered on the system, including proof of business insurance (insurer details, policy number, and scans of both certificate and proposal form are required) for each vehicle.
Using the same mileage system as the company car driver, the employee must enter a full breakdown of their business mileage. However, they must also detail their fuel expenditure, and upload receipts as proof. Presumably this is some sort of anti-fraud measure to stop you claiming 2,000 miles a month and only putting a tenner's worth of fuel in the car. This must also be closed off at month end.
The system calculates the total business mileage covered, and generates a reimbursement via the next pay run at 18p a mile.
4 bands depending on grade
All business mileage has to be logged via an online portal with a 6th of the month deadline for the previous month's entries to be completed.
Company car:
Choice list includes BMW, VAG and Ford.
Cars replaced every 3 years.
AllStar fuel card is provided by the company for all fuel and oil purchases
Employee is required to submit breakdown of all business mileage on a monthly basis, via an online portal, including a closing odometer reading. The system sense checks claimed distances against postcodes, and requires the employee to justify any claim outside a reasonable tolerance.
Based on the above, the system subtracts the business mileage for the month from the total mileage covered. The difference is deemed to be private mileage, and is charged at 12p a mile to the employee. This is a highly automated process. All the employee has to do is provide the business mileage and closing odo reading.
The employee can, if they wish "upgrade" the car to the next grade/band by paying a monthly charge out of your salary (I think it's £70) but this can only be done at the time of ordering a new car.
Allowance:
Again, banded depending on job grade
Very flexible on car choice / age / type. Vague rules about the car being "appropriate" for business use and "presentable", but no real criteria given for this. Absolutely no limits on engine size / CO2 etc. One guy is running a 12 year old Audi A4 and they are still paying him £540 a month!
You can use up to two cars for business use, but each must be registered on the system, including proof of business insurance (insurer details, policy number, and scans of both certificate and proposal form are required) for each vehicle.
Using the same mileage system as the company car driver, the employee must enter a full breakdown of their business mileage. However, they must also detail their fuel expenditure, and upload receipts as proof. Presumably this is some sort of anti-fraud measure to stop you claiming 2,000 miles a month and only putting a tenner's worth of fuel in the car. This must also be closed off at month end.
The system calculates the total business mileage covered, and generates a reimbursement via the next pay run at 18p a mile.
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