[Closed] Company car newbie

Depending on your income you will either be taxed 20% or 40% of the BIK value. Stick the figures in to comcar and it will show you.

Does it include fuel or just the car and you fuel yourself?

A quick look based on a standard 150ps Manual SE Business shows:

2017/2018 - 20% @ £1172 40% @ £2344

The hmrc website is pretty good for this stuff, you'll need to know listed price of car and any options and CO2 figure

Go here. [url= http://comcar.co.uk/newcar/companycar/taxcalc/ ]Comcar[/url]. It will tell you exactly

Fuel card I'm told.
BIK value?

BIK = Benefit in Kind

A tax term which shows how much the tax man thinks the vehicle is worth as a benefit.

Fuel card I'm told.

Check whether it is really worth it to you. You may be surprised by how many private miles you need to do to make it worth it.

BIK value?

BIK = Benefit in Kind

Thanks all.

How will this be taxed as a benefit in kind?

Heavily. I get the option to have a company car, but I take the cash.

Put your figures into Comcar.

Very essentially your car benefit brings your personal allowance down, there is a taxable value on both the car and the fuel allowance if you take it. Don't just assume you pay 20/40% tax on it as that's not how it works, if the car pushes you into the 40% tax bracket you don't pay the higher tax on all of it. Comcar will tell you the figures- you pay tax on the P11D value of the car + options.

Generally speaking a sensible car is worth it, a cash option won't give you enough to run the same car from new per month unless it's very generous. Fuel is a bit different, you don't always get a choice in how you pay for it but if your not a heavy fuel user it might be cheaper not to have the benefit of personal fuel.

Just because you get a fuel card doesn't necessarily mean you get personal fuel as a benefit. We didn't - we enter our mileage at month end and personal mileage is then charged out of our salary. Something like 12p/mile depending on engine size. That has its benefits though - it works out slightly cheaper than the pump price, and you can drive with a heavy right foot and a roof rack and it makes no difference.

Work has recently scrapped the fuel cards though, and now pay people back for business mileage. There's a lot of unhappy engineers, you'd need to do over 50mpg to break even. The rate is currently being reviewed after a lot of complaints.

Always owned bangers until now....
This seems like a bit of a minefield though. Perhaps the best way to look at it is if I'm getting a new car at an advantageous rate.....

Compare the tax position (and company lease cost if you're like my employer) with what it would cost you to either take a personal lease or PCP on an equivalent vehicle. Then you get a truer comparison.

I've left our company scheme, as company cars can no longer be done as salary sacrifice, and that coupled with the mental BIK of anything vaguely interesting, just makes it finanacial stupidity. But my company charges you to lease them as well as the BIK. If your only cost is the BIK then it's a different matter.

^ compared to bangernomics it's pretty advantageous imo, my last personal car which wasn't expensive cost me £180/month over 3 years in depreciation, running costs, insurance etc. Factor in running costs as well as lease/pcp costs for a comparison.

I've come off the company car now due to a job change not requiring a vehicle, and my current nearly 10year old car I bought for what it's worth now, so no depreciation but a quick tot up of the costs over 2 years work out at £100 a month purely in servicing, tyres and insurance.

Company car has never hit more than £80 a month in tax and for that I get worry free motoring and a car in warranty on the drive, as opposed to my current A3 which as I type is sat on the drive refusing to start!