New company car user - understanding costs

[heisthegaffer]

Hi all

I've got a new role which gets me a company car but I don't fully understand the cost implications. I don't get a fuel card.

Is it literally the BIK cost that comes off my net or gross wage?

Looking at a Merc c300e and using comcar.co.uk it suggests I'll be paying about £140 a month it gives a cost at basic and at 40% rate. Does it amortise the 40% rate?

When I tick private fuel it adds 50 quid. What does this mean?

Any other costs?

Thanks

[heisthegaffer]

Scrump said:

You pay tax on the BIK (20% or 40% depending on which tax band you are in).
In effect the BIK is the financial value that HMRC put on you having tje car so tax you on that amount. The BIK amount is itself calculated on the list price of tje car and tje emissions level, comcar is a good site for working this out.

Private fuel will apply if your get private fuel paid for, it sounds from your post that you won’t get this.

Be aware that electric cars have very low BIK so are very cost effective as a company car.

If you have a conventionally powered car then there are HMRC limits on how much you can claim back for the fuel for business miles, my experience is that this rate barely covers the actual cost. There used to be some cars that were better for this than others as I recall cars over 2.0 are allowed a higher rate, so a 2.1 diesel (Mercedes) was preferable to a 2.0 diesel (BMW).

Thanks, I will definitely be getting a PHEV, likely a C300e as it gives c. 60 miles electric range.

I can relax that it'll be BIK I'll pay and nothing else.

Is it off my gross or net wage do you know?

[heisthegaffer]

Uncle boshy said:

The BIK is the value hrmc attribute to the car.

So let’s say you get paid £30k and the car has a BIK value of £4K

Hmrc then say you effectively earn £34k ( salary plus BIK) and then tax you on the whole lot.

How much you pay depends on your marginal tax rate, but effectively your take home pay goes down by about £1700 a year on a c300e if your a 40% tax payer.

4K x 40% = £1699

Thanks very much for this.

Were also moving into a new, bigger house so just don't want any nasty financial surprises - I can relax a bit now.

[heisthegaffer]

PorkInsider said:

Comcar is pretty good for detailing the exact costs based on your salary, the chosen car, personal use, etc., etc.

https://comcar.co.uk/

Cheers. Very useful.

[heisthegaffer]

PorkInsider said:

heisthegaffer said:

PorkInsider said:

Comcar is pretty good for detailing the exact costs based on your salary, the chosen car, personal use, etc., etc.

https://comcar.co.uk/

Cheers. Very useful.

Sorry, just realised you'd already mentioned comcar in your first post

Ha ha no worries at all mate... I appreciate people responding to my daft questions!

[heisthegaffer]

One last question people please, if inorder options does it have a major impact like it does on leasing or just reflected proportionately in the BIK?

Thanks again all.

[heisthegaffer]

Bullett said:

I may have missed it but you may also have to pay a contribution depending on the car and it usually has to be on the 'list' you can't just pick anything.

Assuming you could have anything the standard 'allowance' might get you a poverty spec BMW 1 series. You just pay the BIK. If you wanted an M3 instead then you will have to pay the additional contribution + the BIK on top (of a more expensive car).

Thanks. Hopefully I'll be in line for something like a 330e, C300e or V60 recharge. I really don't want to be paying more than the BIK.

[heisthegaffer]

Thanks all. I am waiting for access to the list as HR still processing my role change. Verbally I've been told the 330e and C300e will be available to me but unsure on the T6.

Perhaps I'll have to go easy on the options albeit I really do fancy a grey car with red leather!

[heisthegaffer]

750turbo said:

OP - I hope you do not stay up here in Scotland otherwise, if you earn more that 43ish? You are straingt into 40% tax rate.

SNP bds!

I'm a Southern softy me!