Company Car Tax - BiK

[SC77Y]

Had my company car written off last month through no fault of my own a non fault crash - a Merc CLA250e was only a year old.
It was ok on BiK being a plug in hybrid but now I have two dilemmas, what to order next and also being lumbered with a high C02 car.

I've been given a Peugeot 5008 as a hire car which I may be with for some time given I now have to order a new car which hasn't yet been sorted for me to order. The hire car is 131 C02 and will cost me £490 a month in BiK! As opposed to the Mercs £150ish so a huge difference.

Will HMRC tax me on this and do I have to pay? Can I argue that the difference in cost should be claimed back from the third party, I've asked the insurer claim handler but they've been useless so far. I don't want to get 3/4 months down the line and be hit with an even higher tax bill for something that isn't my fault and I now have no control over what car I have.

The hire company don't have any electric or plug in cars available and only a small range of petrol cars, after a Peugeot 5008 it was a Mini so not a great choice!

Any advice much appreciated thanks

[Uncle boshy]

I had a similar scenario a few years back with an interim hire car after I moved back to the uk.it certainly focuses the mind at that monthly tax payment.

Unfortunately the answer from the hmrc is that bik is due on the car you have right now. So only way out is to get the hire company to source another low bik vehicle from a different location, find a replacement t company car available pdq or opt out.



Old article but principle still applies

https://businessmotoring.co.uk/tax-can-a-daily-ren...

[cliffords]

Yes as above HMRC tax you on what you drive and won't consider it's not your choice. I had similar many years ago and got nowhere talking to them .

[edc]

You will only be taxed on it if it's reported. If your company is still feeding over the old car details then your BIK won't change.

[Sheepshanks]

edc said:

You will only be taxed on it if it's reported. If your company is still feeding over the old car details then your BIK won't change.

Must admit I was thinking that too. If it was in for repair then I'd certainly be hopeful no-one would notice, however with the car being written off there's much more chance of it being picked up. Might have changed since I had a company car but I think it has to be reported by employers quarterly.

We did end up with a spare car with an oddly high CO2 which no-one would take and had to pay an employee an extra £500/mth to cover its BIK until the lease finished.

[ArmaghMan]

SC77Y said:

Had my company car written off last month through no fault of my own a non fault crash - a Merc CLA250e was only a year old.
It was ok on BiK being a plug in hybrid but now I have two dilemmas, what to order next and also being lumbered with a high C02 car.

I've been given a Peugeot 5008 as a hire car which I may be with for some time given I now have to order a new car which hasn't yet been sorted for me to order. The hire car is 131 C02 and will cost me £490 a month in BiK! As opposed to the Mercs £150ish so a huge difference.

Will HMRC tax me on this and do I have to pay? Can I argue that the difference in cost should be claimed back from the third party, I've asked the insurer claim handler but they've been useless so far. I don't want to get 3/4 months down the line and be hit with an even higher tax bill for something that isn't my fault and I now have no control over what car I have.

The hire company don't have any electric or plug in cars available and only a small range of petrol cars, after a Peugeot 5008 it was a Mini so not a great choice!

Any advice much appreciated thanks

Use a different hire company?

[SC77Y]

I feared as much, HMRC really boil my blood with cars it's such a con and all because of the 'green agenda' another way to hammer the motorist.

My company only use Switch car rental apparently so my options are limited, thinking I'll just sack off the whole company car thing and get my own as I begrudge putting £4-500 pcm in the tax mans pocket for the next 4 months...

[StevieBee]

SC77Y said:

I feared as much, HMRC really boil my blood with cars it's such a con and all because of the 'green agenda' another way to hammer the motorist.

My company only use Switch car rental apparently so my options are limited, thinking I'll just sack off the whole company car thing and get my own as I begrudge putting £4-500 pcm in the tax mans pocket for the next 4 months...

You're not putting £500 in the tax man's pocket though. That's the amount added to that on which your tax is calculated. The actual cash impact on you is around £100 if you're a basic rate tax payer, £200 if a higher rate tax payer.

[Quattr04.]

My company say that if you’re in a hire car they will only report after 30 days

Do you not have anything in your company pool?

Surprised at switch,we use them and I had a PHEV MG HS and then a PHEV BYD seal U last time I had rental cars

Not much point opting out and back in, you’ll be paying 40% of that car allowance in tax anyway and then have to find, buy, insured and run a car on whatever’s left

You could ask your fleet department about recovering costs but I doubt it would go anywhere but you should push them to get you a hybrid, switch definitely have them in their fleet

[fooman]

Sheepshanks said:

edc said:

You will only be taxed on it if it's reported. If your company is still feeding over the old car details then your BIK won't change.

Must admit I was thinking that too. If it was in for repair then I'd certainly be hopeful no-one would notice, however with the car being written off there's much more chance of it being picked up. Might have changed since I had a company car but I think it has to be reported by employers quarterly.

We did end up with a spare car with an oddly high CO2 which no-one would take and had to pay an employee an extra £500/mth to cover its BIK until the lease finished.

I doubt HMRC would notice if you continued to pay the old bik even if they gave you an audit they'd see bik being paid and tick that box, and an audit is unlikely. If it's very short term I'd be tempted.

[Uncle boshy]

StevieBee said:

SC77Y said:

I feared as much, HMRC really boil my blood with cars it's such a con and all because of the 'green agenda' another way to hammer the motorist.

My company only use Switch car rental apparently so my options are limited, thinking I'll just sack off the whole company car thing and get my own as I begrudge putting £4-500 pcm in the tax mans pocket for the next 4 months...

You're not putting £500 in the tax man's pocket though. That's the amount added to that on which your tax is calculated. The actual cash impact on you is around £100 if you're a basic rate tax payer, £200 if a higher rate tax payer.

I think he’s talking about the actual tax. Bik will be x% of the car vale with x being a factor of emissions

[SC77Y]

Uncle boshy said:

StevieBee said:

SC77Y said:

I feared as much, HMRC really boil my blood with cars it's such a con and all because of the 'green agenda' another way to hammer the motorist.

My company only use Switch car rental apparently so my options are limited, thinking I'll just sack off the whole company car thing and get my own as I begrudge putting £4-500 pcm in the tax mans pocket for the next 4 months...

You're not putting £500 in the tax man's pocket though. That's the amount added to that on which your tax is calculated. The actual cash impact on you is around £100 if you're a basic rate tax payer, £200 if a higher rate tax payer.

I think he s talking about the actual tax. Bik will be x% of the car vale with x being a factor of emissions

That's the issue yes it's a 131g C02 rating, dunno how as it's a mild hybrid but that's what it's classed as so it's automatically high 32%. The 30 day thing has been mentioned by a couple of people but I've asked my HR and had no reply shock....

I've asked what is in the pool and it's electric only - which I am not convinced by at all. The best car is a Merc EQA with a 260 mile range but that's likely less than 200 miles especially in the Winter months, and just wouldn't suit me plus I've not always got access to a charger and I don't want to be hanging around supermarkets paying 70P pKw.
The BiK is very low though...

Switch are usually ok but I think their better P-HEVs are all out on longer term hire and right now at least in the South-West there's just not a lot around. Self charging hybrids are just as a high as a petrol really so no advantage in those even.

[Quattr04.]

SC77Y said:

That's the issue yes it's a 131g C02 rating, dunno how as it's a mild hybrid but that's what it's classed as so it's automatically high 32%. The 30 day thing has been mentioned by a couple of people but I've asked my HR and had no reply shock....

I've asked what is in the pool and it's electric only - which I am not convinced by at all. The best car is a Merc EQA with a 260 mile range but that's likely less than 200 miles especially in the Winter months, and just wouldn't suit me plus I've not always got access to a charger and I don't want to be hanging around supermarkets paying 70P pKw.
The BiK is very low though...

Switch are usually ok but I think their better P-HEVs are all out on longer term hire and right now at least in the South-West there's just not a lot around. Self charging hybrids are just as a high as a petrol really so no advantage in those even.

Im also south west and the cars come from the Bristol airport branch, shame they don t have much at the moment

You would probably still spend less having the EQA and charing it publicly than what you would be spending on BIK, you can aslo granny charge at home with. Do the maths?

For instance, I went from a diesel Passat, which cost me £360 a month in bik (£4320 a year) to a model 3 Tesla which is £36 a month (£432 a year so that s already a £3880 saving, I then paid £1000 to get a charger so in year 1 I m £2800 better off, next year it will be more like £3500

I then do 20,000 business miles that I get paid 12p for, that s £2400 a year and it costs me £450 in electric. So every year I m £1900 better off which more than covers any super charging I need to do, which if I do isn t to fully charge the car, just enough to get me home.

Even if you charged at a expensive rapid charger like ionity at 89p kw, you should get 3kw out of the car, so depending what your company pay you it would still work out better than the Peugeot, some companies even just pay the full cost, depends on your policy I suppose
My maths would be that if I added the same 40kw to the car as I do at home at a expansive charger it would cost me £38, and I could claim back about £15 so would still be better off exclusively publicly charging, that’s before any subscriptions to get a cheaper rate (Tesla is 41p) and there are plenty of cheaper chargers around

You could then either negotiate with fleet to order a new car or check regularly to see what comes into stock and swap

How many miles are you realisticly doing in a day? I m a traveling engineer and can do 200+

Edited by Quattr04. on Thursday 18th December 19:57

[Sheepshanks]

fooman said:

I doubt HMRC would notice if you continued to pay the old bik even if they gave you an audit they'd see bik being paid and tick that box, and an audit is unlikely. If it's very short term I'd be tempted.

Companies have to pay Class 1A contributions on the BIK so they're not likely to risk incorrectly reporting it, if the person doing it realises what's happening. However that should be an angle to push the employer to get a lower BIK car, as the higher one will be costing them money (not much though, to be fair).

[SC77Y]

Quattr04. said:

Im also south west and the cars come from the Bristol airport branch, shame they don t have much at the moment

You would probably still spend less having the EQA and charing it publicly than what you would be spending on BIK, you can aslo granny charge at home with. Do the maths?

For instance, I went from a diesel Passat, which cost me £360 a month in bik (£4320 a year) to a model 3 Tesla which is £36 a month (£432 a year so that s already a £3880 saving, I then paid £1000 to get a charger so in year 1 I m £2800 better off, next year it will be more like £3500

I then do 20,000 business miles that I get paid 12p for, that s £2400 a year and it costs me £450 in electric. So every year I m £1900 better off which more than covers any super charging I need to do, which if I do isn t to fully charge the car, just enough to get me home.

Even if you charged at a expensive rapid charger like ionity at 89p kw, you should get 3kw out of the car, so depending what your company pay you it would still work out better than the Peugeot, some companies even just pay the full cost, depends on your policy I suppose
My maths would be that if I added the same 40kw to the car as I do at home at a expansive charger it would cost me £38, and I could claim back about £15 so would still be better off exclusively publicly charging, that s before any subscriptions to get a cheaper rate (Tesla is 41p) and there are plenty of cheaper chargers around

You could then either negotiate with fleet to order a new car or check regularly to see what comes into stock and swap

How many miles are you realisticly doing in a day? I m a traveling engineer and can do 200+

Edited by Quattr04. on Thursday 18th December 19:57

Hyundai Konaq? is the next best thing they have, after that it's a Mini which is just too small for me I'm 6'2 I was originally offered a Mini and said it was no good to me, particularly as I was still immobile after the accident.

Apparently if I take any pool car I then have it until the end of the contract and TBH I'm a bit fussy with cars but my stance is if I'm paying for it then I kind of want a say on what it is I'm driving, not as though it's free.

My driving is mixed really for 2 weeks working at home it will be minimal mileage - gym, shops, short journeys.
But then for the other 2 weeks I'll be doing 4/5 journeys of 150ish miles for work, staying hotels and various places not always with handers chargy. That's why I like a hybrid as I see at is almost free motoring whilst local, whilst when travelling away I will use more petrol but as I'm claiming that back anyways as mileage I'm not bothered. A 330e would be my ideal choice as it's a 60 mile range with a 2.0l petrol engine also. But maybe I will have to do some maths as you say although hard to work out accurately based on my journeys and different locations travelled for work.

[Quattr04.]

It doesn t sound like you re doing massive miles, And when you look into it you ll see how many public chargers are around and how easy it actually does fit into your day of needs be

I agree the EQA is a ugky blob of a car but won t it have the same interior as your CLA?

The KONA is a very efficient EV, and they re very popular and people love them, not my style but I would take one if offered it over a petrol car

I suppose it depends what s more important, the car that costs you £30 a month and is a bit ugly or a car that you prefer but costs you 100s as you ll lose 42% of the car allowance before you ever get paid it. Then you re the one paying for new tyres, MOT, service and repairs

Keeping a company EV is a no brainer really, but you could always try a EV and then opt out, your 2 week milage around town you can just charge it from a 3 pin plug to cover that before you take the plunge for a charger

Edited by Quattr04. on Saturday 20th December 07:58