company car drivers

[martyz]

just been wondering how many members on here are company car drivers as opposed to owners,my 25yr old niece has just been given a new c class with her job,lucky girl,last company car i had was a granada in the early 90's.have times changed that much?

 

[Bircham]

I buy my own cars and always hankered after a company car - but then I don't have to drive 25000+ miles a year! I would imagine that merc residuals/economy would make them more efficient to lease than a mondeo/insignia.
Jon

 

[harrim00]

I was going to take a company car. I do 30k miles per year. In the end I got a better deal buying myself than the lease companies were giving.

 

[Dieselman]

just been wondering how many members on here are company car drivers as opposed to owners,my 25yr old niece has just been given a new c class with her job,lucky girl,

She might not think that once the tax demand rolls in as it's based on emissions and list price.

 

[Deleted member 37751]

She might not think that once the tax demand rolls in as it's based on emissions and list price.

How does this company car thing work?

For example; I work for a company and I earn £800 a week and they give me a company car as part of the package. Without taking the car into account, I take home £600 (for arguments sake). I'll do 20k a year in the car.

Based on those rough figures, how much would it cost me to run a company car?

 

[renault12ts]

Here:

HM Revenue & Customs: Company cars

 

[Rory]

For example; I work for a company and I earn £800 a week ?

I know it's just an example, but you immediately hit on an issue. At £800/wk you'd be just under the 40% tax threshold. The Benefit-In-Kind (BIK) value of the car would push you over, so most of the extra tax you would pay would be at 40%, which is (obviously!) twice as expensive as if you were only paying 20%.

Another thing which makes a big difference is whether you have your private use fuel paid for. Some companies still insist on it as it save a lot of admin hassle, but it's a lot of extra cost tax-wise.

 

[trainer]

I have a company car which I use in the week and for some long journeys at the weekend. The rest of the time I drive my C32.

I claim mileage on the company car journeys that are not my regular commute.

 

[Igurisu]

I just gave up my company car at the end of last year. The tax was horrendous, in addition I had fuel paid for by the company so additional tax of almost 3k per year.

I've just got my new tax code through for 2012. Its gone from a K500 to 450l, a huge difference plus I get an allowance from the company in lieu of a car.

Maybe it works for some people but given the way they are taxed I don't believe there is any benefit for most employees. Sure it is different for self employed or business owners.

 

[Bobby Dazzler]

I opt out. Tightening policy means an AMG is a no-no if travelling on business from 2013' as car must emit less than 160g/km.

 

[DITTRICH]

Nowadays you must take care when accepting a company car as you are taxed on it heavily. As said you are taxed on private use fuel too. There is no substitute but to read up on it and do the sums yourself. A company car does get insured, fuelled, depreciated and serviced by the company - and may well turn out cheaper than getting a car allowance and claiming business mileage.

 

[Adam230K]

When I was in that position I opted for the extra money and bought old v8's, I'm not one to care about driving new cars, just wanted a luxobarge with a serious engine and used that money for fuel and maintenance. The tax is really off putting if I want a car with reasonable shove

 

[DPP]

I was a company car driver for most of my working life but the tax became prohibitive and the options more restrictive so I opted out and took the cash alternative 8 years ago. I have not looked back.

As others have said here it will depend on individual circumstances whether or not a company car is the best option.

One advantage of opting out is that tax returns are now a doddle.

 

[charliefarley]

I have a new C220D Sport Estate as Company Car... and it's great.

OK, I have £220/month taken away in BiK tax... (I pay private fuel) But for that, I run a decent car that is never older than 3 years, if it breaks it doesn't cost me anything- if somebody crashes into me, it's not my insurance- when it needs new tyres I don't need to fork out £800 for a set of boots...

I do about 26k pa- 50:50 split Business: Private.

£2.6k pa for 13000 private miles = 20p / mile
+ fuel at, say 15p/mile.
Surely that is good value considering there is also zero hassle factored in?

 

[FamilyPack]

A company car is a great thing and certainly worth having - if it's purely additional to your income.

However, if you drive 20k miles per year, half and half business and private and your company gives you a choice of, for example:

1. A new c220 blue efficiency sport, auto, metallic, saloon with business fuel paid for. OR
2. £500 per month car allowance and 45p per mile for business miles

then it's nowhere near so clear cut if you do the full comparison.

The maths gets complex as it's dependant on many things, so I've had to make some assumptions, but if you were a 40% tax payer then the bottom line over 3 years would be:

1. You'd get a nice car that you'd have to put fuel in for private usage.
2. You'd have £26,535 net, in your pocket, to buy (or lease), tax, insure and service a car and put private fuel in.

Given that option 1 may not offer you the car you want anyway...

 

[bpsorrel]

I ran company cars (and a weekend private "toy") for most of my working life, until 12 years ago when I left employment and set up my own business. Since then I've simply bought the cars I liked, for cash, and claimed the 40p a mile expense off my tax. Doesn't cover the costs of course, but lowers my tax a bit.

Do I miss a company car? Sometimes I miss the hassle free aspects, but not the huge tax bill people pay these days!

 

[FamilyPack]

claimed the 40p a mile expense off my tax.

Make sure you get your full amount - 45p this year

HM Revenue & Customs: Travel - mileage and fuel allowances

 

[Mr E]

We get a fairly meagre £400/mth allowance, but have almost complete flexibility on how we spend that.

I could take that, net at £240/mth and buy my own. Or, with our latest HMRC approved scheme, add my allowance to my salary and then pay for the lease through salary sacrifice pre-tax.

Currently my E220 estate costs me £620/mth - £330 of that is BIK as it's rated at 194g/km for emissions, rest is what I add in above the allowance (and is offset against the BiK calculation).

My new quote for an E220 CDi Saloon (with a few toys) is £695/mth - off that comes the allowance so the cost to me (tax, contribution, etc) is now under £300/mth. Most of that comes from the emissions coming down to 132g/km, but I'm also not paying 40% on my contribution either.

Considering that this is for 2 years, tax, insurance, maintenance, I don't think I could do any better doing my own thing.

If I wasn't in the car scheme, I could also choose to lease a vehicle through the same route but obviously wouldn't benefit from the car allowance.

I will probably average 18k/yr, as I now work from home, with about 7k business miles a year.

If your company doesn't operate a salary sacrifice scheme for company cars, it might be worth asking them to investigate it as it seems to work very well for us - we also use 2 lease companies for a bit of competition as well as having about 4k cars in the fleet, so our buying power is quite considerable too.

 

[Rory]

OK, I have £220/month taken away in BiK tax... (I pay private fuel) But for that, I run a decent car that is never older than 3 years, if it breaks it doesn't cost me anything- if somebody crashes into me, it's not my insurance- when it needs new tyres I don't need to fork out £800 for a set of boots...

....
Surely that is good value considering there is also zero hassle factored in?

I do massively miss the peace of mind of having a company car - not worrying about it if it made a funny noise, or had to be left in some dodgy hotel car park overnight etc!

I get a good allowance (monthly amount and per business mile payment) and I don't think about the figures too much, but I reckon if I costed in depreciation I wouldn't be that much better off.

 

[Rory]

We get a fairly meagre £400/mth allowance, but have almost complete flexibility on how we spend that.

I could take that, net at £240/mth and buy my own. Or, with our latest HMRC approved scheme, add my allowance to my salary and then pay for the lease through salary sacrifice pre-tax.

Currently my E220 estate costs me £620/mth - £330 of that is BIK as it's rated at 194g/km for emissions, rest is what I add in above the allowance (and is offset against the BiK calculation).

My new quote for an E220 CDi Saloon (with a few toys) is £695/mth - off that comes the allowance so the cost to me (tax, contribution, etc) is now under £300/mth.

Am I missing something - those monthly figures seem high, surely it would be possible to lease those cars for less? OK, there's insurance and maint included, but that wouldn't be much.

Even with the benefit of salary sacrifice, you're still 'paying' the £240/mth net allowance, plus £300ish per month - that still seems quite a lot.