Cash for car allowance

[Dieselman]

Out of the members on here who opt for a car allowance instead of a company car, what annual mileage do you do and recover under an expenses scheme?

If it's not too rude to ask, can you say what type of job role you perform, for example Sales, Marketing, Admin, Technician, Engineer, Director, etc?

 

[BigSilverEstate]

At our place they just offer the cash alternative but no company car scheme. Nobody does a job that involves significant business miles so it is basically just non-pensionable salary by another name. On the plus side, as it is regarded as a benefit in kind rather than salary, it continues to be paid when, like me, you are on extended paternity leave and not receiving a salary.

PS I am an accountant involved in financial reporting.

 

[Noustie]

I opted for the Car allowance a couple of years ago but my Company mileage has crept up to 6k plus this year already, pretty much all travel to and from airports. I'm also interested to hear what other folks get per mile having taken this option? Myannual mileage is around 22k and I think 8k will be work related.

Export Sales

 

[NISFAN]

About 28-30k miles pa.

Technical Sales

Paid AMAP rates, so about £9500 pa

 

[Alps]

just as bigsilverestate, just get cash no milage expected

 

[stevieb15]

As its my company I pretty we'll chose whatever option works best for me, which we're currently debating with the auditors.
In my last role working for someone else my car allowance was 10% of salary plus 25 pence per mile...on 50k miles per year in a 5 year old 530 diesel it was like printing money!

 

[Dieselman]

About 28-30k miles pa.

Technical Sales

Paid AMAP rates, so about £9500 pa

Did you vote on the poll?

 

[Deleted member 6183]

Around 40k, 28p/mile plus claim amap. (+ car allowance)
Need to clear 25mpg to break even on fuel at today's prices.

Depreciation is the killer although brake and tyre replacements come around a bit quick for me.

 

[developer]

No allowance........

Dogsbody...........

 

[NISFAN]

Did you vote on the poll?

Yep

 

[Palfrem]

H&S Manager

Taken allowance for years.

Currently on HMRC 26p per mile for >2000 litre petrol. At 27 mpg that's around 90p to the goods per gallon. Rate for meany < 1.6 diesel is only 12 per mile. Check out the sums.

Factor in rebate from taxman and the fact no BIK is paid, then providing monthly allowance > depreciation, I'm happy.

Buy wisely on low mileage and after 12 months when MB AUC warranty has expired chop it for another one.

 

[@MARK]

My company does this differently.

No car allowance (although salary reflects this) and then the HMRC private mileage rate of 45ppm dropping to 25ppm after the first 10000 miles.

 

[RichardM]

just as bigsilverestate, just get cash no milage expected

Same for me, software development. HMRC rates when I do have to go out.

Used to have the choice of a company car, but now forced to have the allowance.

 

[trainer]

Amongst my many remits I manage the fleet for our company and we are looking at changing our car scheme. We have 130 plus company drivers doing 10k plus business miles a year and claiming the appropriate HMRC rate for the engine size.

As the fleet vehicles are coming off hire we are looking at moving peopel over to car allowance - me being one of the first.

Currently driving a 1 series which was 6 months old when we leased it. On allowance I might go for a 2-3 year old car and go for economy over fun. Keep the pennies saved to one side so I can still run the C32 at weekends

 

[TDE1]

Management. Have voted

Interested to see where this is going, DM...

 

[Bully2112]

I get a good car allowance on my basic salary, so its 100% taxable. Luckily i get a fuel card, and this is taxed as a benefit in my tax return.

In all i do about 6k actual work related ie not including to and from work.

It doesnt cover the cost of running the car i own, when you add it all up, but if i was on the car scheme, my options would be nowhere as good as what i drive. and driving a nice car is important to me.

If i was doing higher mileage ie 20k pa, as has been the case in the past, this really hits the residual, and makes owning a performance car thats used for work very costly. in my experience, you dont think about this when you take the plunge and buy that dream car, but when it comes to part exing it, boy it leaves a bad taste.

 

[A-AvantGarde]

I've just moved over to car allowance after a change in role.

After having company cars for over 10 years, it was quite a change when I gave back my company 5 series!

However my new role is based so much closer to home and I spend at least a day a week in central London too. So, in terms of business mileage I can't see my business miles even exceeding 5k per annum now. I used to do 15k business miles per annum before and in a previous role have even done more like 20k.

However, our mileage rates are in my view extremely poor:

Company Car / Allowance Private Car
Petrol Car 18p / mile 26p / mile
Diesel Car 14p / mile 23p / mile

I could take a car still, however with the car scheme here my options would be nowhere as good as I'd like and not having the tax liability associated with a company car is nice!

Still haven't bought / leased a replacement for my 520d yet.

 

[Sp!ke]

I think that a colleague of mine carefully calculated all this and created a chart showing precisely where the break even points were bases on annual mileage/fuel costs/allowance/taxable rating of car

If I recall, the point at which he worked out it started to be beneficial to take the the monthly allowance was if you did *under* 18,000 miles a year based on a middle to low CO car. Things would have changed since he last did this as fuel price has rocketed.

Mileage is the clincher... and personal mileage more important than business miles when working out your options.

 

[Sp!ke]

However, our mileage rates are in my view extremely poor:

Company Car / Allowance Private Car
Petrol Car 18p / mile 26p / mile
Diesel Car 14p / mile 23p / mile

I think you are only quoting half the story. Suggest double checking with your HR department.

With a privately owned car you should get mileage payments from two sources.

The first payment should come from your company as you've posted above but you should then also get tax relief on the tax you've paid on your car allowance by submitting a mileage claim to hmrc (for wear and tear on your personal vehicle).

From recollection this figure works out to a further 13p per mile, meaning that in total you should get compensated about 40p per mile for business miles (using a 2.0l petrol car as an example)

 

[A-AvantGarde]

I think you are only quoting half the story. Suggest double checking with your HR department.

With a privately owned car you should get mileage payments from two sources.

The first payment should come from your company as you've posted above but you should then also get tax relief on the tax you've paid on your car allowance by submitting a mileage claim to hmrc (for wear and tear on your personal vehicle).

From recollection this figure works out to a further 13p per mile, meaning that in total you should get compensated about 40p per mile for business miles (using a 2.0l petrol car as an example)

Thanks, yes I believe you're right. My understanding is that you can claim tax relief on the difference between the HMRC published rate and the amount claimed back? Although as I've only just started doing this as yet I don't have any experience of doing this.