Hi,

Been offered a new job with a salary increase and a company vehicle.

I’ve never had a company car before and was wondering how the car tax works.

From my interview I gather I can either choose to pay for my personal fuel by recording mileage or have the fuel included and pay tax on the total.

I was wondering what I will be paying monthly on the car? A rough estimate is all I expect as I know an exact figure is hard to guess.

I have checked online but I’m yhink I’m being a bit dim and maybe panicking I’m going to get stung.

I must add it’s not a brand new car so maybe I won’t need to pay tax? Wishing thinking maybe.

Thanks

a percentage, based on the g/CO2/km of the list price will be deducted from your tax free allowance and you will pay

ergo a car with 0-99gCO2/km = 19%

so, say 19% of £20,000

=£4k ish

so between £800 and 1600 per annum depending on where you are in relation to standard and higher rate tax

Obvs the higher the emissions and list price of the car the higher the tax

I would be looking at hybrid.

Apparently the BMW 330e is silly cheap for company car drivers

You need to understand all the terms and conditiona, a mate of mine has a clause in his agreement / contract to do with speeding tickets and other motoring offenses which is very nasty. I recall back years ago that drink driving conviction in a company vehicle was gross miscondict and sacked for another mate.

There is more to making a decsion than just tax considerations

Not being new makes no difference, tax is on list price when new. For a 2l diesel insignia I pay £1200pa or thereabouts but Co car takes me into 40% tax bracket and I record all private mileage and pay for that fuel on top – you will need to provide proof that you pay for private fuel ie receipts

http://comcar.co.uk/
Good guide to the amount and how selection influences the cost.

Unless you do little private mileage it’s usually a no brainer. A little research in advance is a very good thing though.

I was wondering what I will be paying monthly on the car? A rough estimate is all I expect as I know an exact figure is hard to guess.

Have a good play on Comcar as you might be surprised at some of the rates that you’ll pay.
Seems like a good idea that a convicted drunk driver is sacked by the company that is paying for the car that you drive for work, same with speeding tickets while on the clock. No reason to feel hard done by.

I log (apparently this upsets a few people) and pay for all my private miles at 11p per mile. Works for me.

With reference to the 40% tax bracket please explain this to me.

For example would a 30k salary and a 20k car take you into this?

Yeah I do not drink drive and if I did I would expect to be sacked

if you were on a salary of say £2k under the 40% tax bracket & got a co car that was assessed as being a benefit in kind of £4k the tax on the co car you would pay would be £2k at 20% & £2k at 40%

the example you give would be unlikely to take you into the next tax bracket, but if the salary was mid thirties to forty it could well do

This is very new to me so trying to get my head around things

Captain Sasquatch do you pay company car tax as well as your private fuel ?

The tax band thing works like this:

Personal Allowance Up to £11,000 0%
Basic rate £11,001 to £43,000 20%
Higher rate £43,001 to £150,000 40%

Your company car will be assessed on list price when new and emmissions, e.g. assume it’s considered to worth £4000 to you this will be knocked off your personal tax free allowance so you’ll now be paying tax on your pay as follows:

Personal Allowance Up to £7,000 0%
Basic rate £7,001 to £39,000 20%
Higher rate £39,001 to £146,000 40%

So if your salary is less than £39000 you’ll pay an extra £800 tax. As for fuel in my case I pay for all fuel and then claim back any business mileage I do.

Captain Sasquatch do you pay company car tax as well as your private fuel ?

Yes, I pay the BIK. For me it’s as necessary as the desk or chair for an office worker so I do begrudge the tax and will do until they are taxed on such items that are necessary to their work too.

So basically with the example I have I’ll pay an extra £800 ish a year in tax plus for my personal fuel ?

Yes. The tax people will reduce your tax free allowance from £11k by whatever they think the car is worth as a benefit in kind. This will be as a percentage of the value of the car plus taking into account the co2 emissions. So say they think the car is worth around £3k a year as a benefit. They will reduce your tax free allowance to £8k a year meaning you will pay 20% extra tax on that £3k amount which would equal an extra £600 a year. There are calculators online that will tell you the exact amount if you know what car it is.

Company car tax calculator

Always worth checking next year’s (and further) tax cal as it ramps up. Then if you can negotiate a short car lease.

If your mileage is less than about 20k I would go for a car allowance. You then pay tax on the allowance as if it were salary, and claim mirage at an agreed rate (currently 11p per mile). This give you more freedom if you want an older car or one with high CO2. I get £5200 pa and lease a new car with a list price of £33k well within this.