Car Allowance

[Dieselman]

The whole of the car allowance is taxed at your normal tax rate relief is no longer available, the only relief is on the mileage rate if you employer pays lower than the HMRC rate.

That's not how it works.

The funds paid are taxed, but then the mileage driven gives a rebate on any earnings paid to the employee.
It doesn't really matter how the allowance is made up.

If Spinal is doing a reasonable mileage then at 40% tax, he could make a killing on the rebate and far outweigh the tax paid.

 

[Dieselman]

There's a case in court at present on this very subject, employee ignored company policy and purchased a car outside of guidelines which I think was 130g co2, employer disciplined him for it, he took them to a tribunal and eventually court as he reckoned it was against some european legislation and he was free to choose whatever vehicle he wanted and the company did not get a say in it. I think this one is the first of its kind so be interesting to see how it turns out.

Surely, if their written policy stated they would only pay the allowance if the car was below 130g/km, or only cars below that figure could be accepted for company use, then they do have a say in what car s allowed on their fleet.

 

[Sp!ke]

That would be my take on it, afterall he does t have to take a company car offer, he could fund it himself.

 

[Dryce]

Surely, if their written policy stated they would only pay the allowance if the car was below 130g/km, or only cars below that figure could be accepted for company use, then they do have a say in what car s allowed on their fleet.

Depends.

If it's accepted that the employee may add to the allowance to pay for the car and that responsibility and ownership remains with the employee then the level of influence the business is attempting to extert of an employee's property may be deemed unreasonable. It's not part of the company fleet.

If it's so important to the employer then they shouldn't offer a car allowance option - but run their own fleet of company and/or pool cars.

 

[flango]

That's not how it works.

The funds paid are taxed, but then the mileage driven gives a rebate on any earnings paid to the employee.
It doesn't really matter how the allowance is made up.

If Spinal is doing a reasonable mileage then at 40% tax, he could make a killing on the rebate and far outweigh the tax paid.

I'm not sure what you are saying here, HMRC told me no relief on allowance payment anymore only claimable relief is on mileage rate, so if employer pays say 15p per mile while HMRC rate is 45p per mile you can claim tax relief on 30p per mile.

 

[flango]

Surely, if their written policy stated they would only pay the allowance if the car was below 130g/km, or only cars below that figure could be accepted for company use, then they do have a say in what car s allowed on their fleet.

No Company policy overules UK or European law, If there is such a law in place that allows freedom of choice then the company doesn't have a say, like I said we will have to wait and see how it turns out.

 

[Sp!ke]

We had a change of company car policy in my company in our German office.

Since we are a Japanese company, they decided that the company cars had to be Japanese - it really didn't go down very well at all.

 

[Palfrem]

It's the company's money so I guess they can dictate how it is spent to some extent.
Not sure they can mandate a particular nationality of car though - that may infringe EU rules somewhere.

 

[Sp!ke]

not for company cars - car allowance maybe...

 

[Spinal]

So I've finally gotten my hands on the leasing site... I can either take an allowance and use it as I will, or get a company lease car by using that money (+ some of my salary if needed)... The advantage is they take care of servicing, tyres, insurance, road tax, MOT, etc...

I must admit, it's quite challenging to choose! My biggest issue is that it is a 24 month refresh, I quite like changing cars more often than that... (though I've had my £300 ford probe for 3 years and counting... only doing routine serviving...)

Any suggestions at cars I should be looking at in the sub-£400 per month (ish) leasing range? I will sheepishly admit I'm a little off the C-class, the W202 was my last favorite c-class. The W203 put me off the line. I'm thinking an e-class... or maybe something entirely different and look at a fiat 500, or an alfa mito (the quadrifoglio edition at 170bhp looks like fun...)

The only real restriction is that it can't be 2-doors....
M.

 

[st13phil]

Any suggestions at cars I should be looking at in the sub-£400 per month (ish) leasing range?

A few years ago a friend of mine made the mistake of going for something he thought he'd enjoy driving as his company lease car, so chose a BMW 320d M-Sport. Unfortunately he was doing a fair annual mileage - which meant spending long hours behind the wheel - and soon regretted picking something with a hard ride that he had to endure 24 months with. The lesson from that is to make sure you pick something you'll be happy to drive for 2 years, because unlike a private buy that you decide you don't like, you're stuck with it.

The E-Class is a great long distance cruiser and does a fair job on B-roads too, but it's a big car that needs a big parking space. Something like the Mito will drive you nuts if you need to spend long hours in it. The BMW range is popular because BIK charges are very favourable (and because accountants generally lack imagination ). The new W205 might be a good bet, other than that there's much to commend a high-spec Golf.

 

[Spinal]

What is the consensus on the Dacia Duster? I can get the laureate 4x4 edition for just over £200 a month... which is less than I'm currently paying for insurance alone on my cars.

Reading through the T&Cs, I can use it for private use as well, with no mileage limit, which is brilliant... just need to find something that can be a motorway cruiser and fun to drive at the same time...

Also noticed that there are a few "pre-owned" cars, whereby the person with the lease has left the company. I'm tempted to try a Fiat 500 they have falling under this category as I would be able to change it in 3 months time (Sep 2012 car, lease expires in Sep 2014... and I would get a further 25% discount on the lease for leasing pre-owned. Just worried it will be wrecked...)

M.

 

[Sp!ke]

Id try the fiat..
Nothing to lose if you can hand it back in Sept.

Also gives you time to get your head sorted regarding the Dacia.

 

[Bobby Dazzler]

If you do go for the FIAT then it's worth inspecting it for damage first. Your cost centre manager might not appreciate if you bring a car with a big repair bill to make paintwork right in September if the damage was done by the previous user.

 

[Dieselman]

A few years ago a friend of mine made the mistake of going for something he thought he'd enjoy driving as his company lease car, so chose a BMW 320d M-Sport. Unfortunately he was doing a fair annual mileage - which meant spending long hours behind the wheel - and soon regretted picking something with a hard ride that he had to endure 24 months with. The lesson from that is to make sure you pick something you'll be happy to drive for 2 years, because unlike a private buy that you decide you don't like, you're stuck with it.

The E-Class is a great long distance cruiser and does a fair job on B-roads too, but it's a big car that needs a big parking space. Something like the Mito will drive you nuts if you need to spend long hours in it. The BMW range is popular because BIK charges are very favourable (and because accountants generally lack imagination ). The new W205 might be a good bet, other than that there's much to commend a high-spec Golf.

Good advice. The other day saw a round trip of 400 miles in the C-Coupe. It's ok, but nothing like as comfortable as the old W210.
I feel a CLS beckoning again.

 

[st13phil]

The other day saw a round trip of 400 miles in the C-Coupe. It's ok, but nothing like as comfortable as the old W210.

It's only when you do a long day in a car that you really work out whether it's truly comfortable, and ride quality makes a massive difference to how tired you'll feel at the end of that drive.

I spent a good 5 hours on the M1 as a passenger in a BMW 520d last week and was shocked at how jiggly the ride was - and it wasn't on big wheels & sport suspension, either. My E63 in comfort mode and on 19" wheels felt plush and forgiving by contrast.

 

[Sp!ke]

Take the cash and get this

PIAGGIO APE 50 cc

 

[MancMike]

Going to sound totally dumb here, but what is a car allowance?

 

[Merc Owner 2B]

Going to sound totally dumb here, but what is a car allowance?

Some jobs come with a cash allowance to buy a car instead of providing the employee with a company car. Sometimes as an addition to salary other times because the job requires a car