my car is depreciating anyway and my insurance costs are the same. an mot is a legal requirement regardless of the use of the car.
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Anyone use their own car for work?
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Posted 1 year ago #
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just milage allowance which is 40p for the first 10000 and 25p for the rest tax free
loosing £1000 a year on that? Holy crap!
When I was on that, doing about 14-15,000 miles a year, I was COINING it in! Even on 25p/mile I was in clear profit!
WTF are you driving? Ferarri?
Posted 1 year ago # -
How are you down £1k/year? 25p covers my fuel and even the loan payments for me.
I bet the mileage is high in this case.Having a company car/car allowance in many cases is overwhelmingly for the benefit of the employer, not the driver. Many left company car schemes about 9 years ago when tax on them became too punitive. I was one of these people, sick of paying through the nose for a vehicle i didn't want and being forced to notch up miles that were for my employer's interests, not mine. My view was that; life behind the wheel of a grubby run of the mill saloon, in the conjected south east of England, was not something I should have to pay for!!!
The cost per mile is much higher for drivers who do low mileages. Those who do high mileages wear their cars out, spend more on wear and tear items and take an extra hit on extra depreciation.
Getting the balance just right is tricky and owning a car places all the risk on the employee, so these are grounds for a proper car allowance.
I used to get £450 a month plus 8p a mile. This worked well for me because I was able to cut my mileage to less than 10k when switching from a company car. Prior to this, I was doing extra mileage to get to 18k, after which the taxable benefit for the car was halved.
Even with an allowance, I was still able to claim relief on the difference between 8p/mile and 40p/mile for the first 10k miles and on the 25p thereafter. I can't remember the exact detail now, but it was definitely worth claiming.
I couldn't believe how, after many years of paying company car tax, that the HMRC were having to pay me. How stupid was that change in the method of taxing company cars? The government must have lost a fortune in tax receipts! I think they killed a golden goose there, but then Labour are all about punitive taxes and the politics of envy. They must have misguidedly thought we were all enjoying our crappy company cars and the disadvantages they brought! Commercial numbnuts those lefties eh!!
These figures of 40p and 25p are what you can claim before any tax is due and have been in effect for at least 10 years. It's high time they were reviewed as cars, fuel, RFL have all gone up markedly in 10 years!
If you get paid a set monthly car allowance, this is treated as income and is taxed at whatever your rate of pay is. If this additional income will take you into the higher earnings bracket, you are a bit stuffed if you have savings and other benefits in kind.
If it is possible to easily/quickly get to your place of work on foot, by bus, bicycle or train, suggest to your employer that they provide a pool car for you to use, entirley at their expense! They need the car, not you, so get them to pay! Why should you have the hassle and responsibility of owning a car, just for their benefit?
It's easier said than done, but sometimes you are better off changing jobs.
Good luck!
Posted 1 year ago # -
£6,500 per year taxable car allowance, paid same way as salary
car has to be 5 yrs or younger
17p per mile (claim difference upto 40p /25p as others have said from HMRC)
I do on average 15-20,000 business miles a year but when Im in the office its only 5 minute drive / 15 minute by bike so its cost effective for me to have opted out of the company car schemePosted 1 year ago # -
That's a good allowance iain1775. What list value of car do you run?
I've estimated you get about £7.5k in your pocket, which should cover full running costs of a half decent car.
Posted 1 year ago # -
£6300 per year allowance, taxed as income.
Insurance up to £1200 paid, including breakdown cover.
Fuel card for personal and private fuel, taxed as income.The trick in this situation is to document business mileage and claim tax relief at 40% on 40p per mile (do less than 10k miles). This tends to pay for the tax on the fuel card, so free personal mileage.
Similar caveats on car type and age as other posters.
Posted 1 year ago # -
your model is distorted as you are paying off the capital in the car in two years. This takes no account of the residual value of the car.
Bingo.
Unless your car is worthless at the end of the 2 years, you're totally mis-accounting the value and your losses.
Personally I struggle to come anywhere near as high as 25p a mile running costs on my car, but I don't NEED it for business and I have a couple of spares so I can see why you might have requirement of RAC etc.
Posted 1 year ago # -
The trick in this situation is to document business mileage and claim tax relief at 40% on 40p per mile (do less than 10k miles). This tends to pay for the tax on the fuel card, so free personal mileage.
I really doubt this. Can you show your figures?
When i last looked at the tax on a fuel card (10 years ago when fuel was 78p/l). I calculated that i would need to do IRO 14000 private miles to break even with my 50-65mpg 1.9l diesel. The fuel card was a big chunk of the tax and definitely a deal breaker if imposed alongside a car allowance.
The best scenario is for employers to pay the maximun mileage allowance (40p and 25p), offset by a reduced monthly allowance to mitigate your tax liability. This would be cheaper for them and you, assuming you don't then go and notch up extra business miles purely for the sake of the extra money.
Posted 1 year ago # -
Surely what you're actually getting from your figures is a car for yourself for private use for £1k a year? Many people would think this a very good deal if driving a newish car, it'd certainly cost you more without your mileage allowance!
Posted 1 year ago # -
That's a good allowance iain1775. What list value of car do you run?
I've estimated you get about £7.5k in your pocket, which should cover full running costs of a half decent car.
Really?
How do you work that out?
I pay tax at 40% on the 6500
Fuel costs around 11pence per mile, I get 17p (difference to 40p just affects next years tax code)
How do you end up with me having 7.5k in pocket at end of year?But yes I am much better off now that i was when I had company car and fuel card. My tax code is far more favourable now
I got an 11month old Hyundai i30 Premium with 8k miles on clock for 10k. Has more bells and whistles than my old company Beemer used to
I will pay the initial loan off comfortably from the allowance over 2 years, keep car another 2 whilst raking in the allowance, should get me a decent deposit for next car, when this one will be handed to the wife and her existing car sold
Im not really fussed by flash cars, been there done that but being company cars I never owned them outright. Happy to run around in this for a few years, it has comfy seats and cruise control, thats enough for me up and down the M6 to Scotland!Posted 1 year ago # -
Yeah but Steve he's paying £1kpa for a car he doesn't want or need, that's the point.
Posted 1 year ago # -
^ Wot Molgrips says! If I didn't need the car for work I wouldn't have one as the missus has a nice Golf GTI which to be frank is a lot more fun than my TDI Passat
We do use mine as its cheaper to run than hers but before this job I didn't have a car and went out and bought the Passat the weekend before I started.
Posted 1 year ago # -
Does your contract say you have to have a car? If not tell them you're selling it and won't be replacing it. They'll either have to provide you one or negociate... Done.
Posted 1 year ago # -
Contract?? Thats another thing thats not happened yet!
Posted 1 year ago # -
Spongebob - did 8746 business miles in 2009/10. Claimed tax relief at 40% on 40p x 8746. Worked out as a cash rebate of around £1400, which more than paid for the 40% tax on the fuel used for personal miles
Posted 1 year ago # -
I'm not sure that you can have done the sums right. Is a five year old car really depreciating at 15%pa? Not sure I've quite grasped the repayment bit either - have you allowed for the residual value after two years? If you're expecting the mileage rate to pay off the car loan in two years then I think that's a trifle unrealistic, but you'll be quids in in year three
Posted 1 year ago # -
Mike_D
Who you refering to? Me?Posted 1 year ago # -
Fuel card for personal and private fuel, taxed as income.
The trick in this situation is to document business mileage and claim tax relief at 40% on 40p per mile (do less than 10k miles). This tends to pay for the tax on the fuel card, so free personal mileage.
So even if you have a fully funded fuel card, you can claim the tax back based on 40p/mile?
How far back can you claim?
Posted 1 year ago # -
Uplink - the amount I spend on the fuel card is reported on my P60 as untaxed earnings - it is not related at all to business/private mileage. It's just seen as extra income. It gets entered into my tax return, so I owe the Inland Revenue the tax on the entire amount.
However, since I do some business miles, I can claim 40% tax relief on 40p per mile (up to 10k miles), which I also enter into my tax return. So far it seems to balance out the tax on the fuel card. I realise this is a huge perk.
I claimed for a couple of years when I realised I could do this. No idea how far back I could have gone. This is fuel for a private car, I believe the rules are different for company cars.
Posted 1 year ago # -
Ayatollahofniche - Member
If you don't mind me asking what's are your allowances?
We don't get a monthly allowance, just milage allowance which is 40p for the first 10000 and 25p for the rest tax free. I've just sat down and done my sums and with the current fuel prices etc I'm loosing over £1k per year. I'm having a meeting in 2 weeks when the md gets back. I just want to arm myself with other suggestions as to what other people are getting.
Personally I'd like a monthly allowance, then a lower milage allowance.Thanks in advance.
Posted 8 hours ago # Report-Post
YOU HAVE TOLD YOUR INSURANCE COMPANY YOU USE YOUR CAR FOR WORK RELATED BUISSNESS AND TOLD THEM YOUR ESTIMATED MILES, AND ARE THUS CLASSED AS A BUISSNESS USER, AND SHOULD PAY MORE INSURANCE PREMIUM.
I HAD TO.
Posted 1 year ago # -
I believe the rules are different for company cars.
Indeed they are - I misunderstood your post
I suddenly had thoughts of claiming tax back on 200k miles, but that dream [& the accompanying new bike] has now died
Posted 1 year ago # -
Project, I'm insured for business use, as said in a previous post.
Posted 1 year ago # -
To answer the OP ..............
I get £5300 pa car allowance & can claim 16p per business mile off the company + the tax back from the gov as highlighted elsewhere
Posted 1 year ago #
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