company car drivers

[FamilyPack]

Am I missing something - those monthly figures seem high, surely it would be possible to lease those cars for less?

Sometimes the higher annual mileage of a company car driver (25k, 30k or more) can push leasing costs up.

Also, you need to allow for maintenance (depending on the lease option of course) and annual RFL as well as insurance.

Personally, I've taken the allowance for the last 15 years in preference to a company car as I prefer to have the money and choose what to do with it.

 

[Red C220]

This is a great tool in which you put all the numbers including your salary and it tells you what you pay.

Comcar Company car tax calculator and guides

We gave up company vehicles 2 years ago as the tax had simply become excessive.

 

[Deleted member 37751]

So you only get taxed on the car when you use it for personal miles?

 

[renault12ts]

So you only get taxed on the car when you use it for personal miles?

No, you get taxed on the whole car, and the fuel (if it is supplied by your company including personal use).

 

[Deleted member 37751]

No, you get taxed on the whole car, and the fuel (if it is supplied by your company including personal use).

How can they tax you on something that is an absolute necessity to do your job?

Am I missing something here? So if I did 20k a year in a company car and did zero personal miles, I would be taxed more than if I stay in the office and did zero miles in line with my job?

 

[charliefarley]

You are only taxed on it if you take it home and use it for private mileage. If the car is based on a business site, and used exclusively for work, it is simply a business tool and nobody is taxed.

It strikes me that the key to whether it is better to take company car or opt out / cash alternative, is forecast private mileage???

 

[Mr E]

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.

I had a quick look at the Lex deals posted elsewhere this morning - E220 sport @ £311+vat. So that's £370 once the VAT is on. I've added on a few extras such as COMAND, heated rear seats, Harmon Kardon, etc, and I get to a base price of about £41k (working from an E250 AG). I've also got 25k per year mileage as I'm expecting more trips to the place in France, and have to bear in mind that clients are fickle beasts and may want me to work from their premises on a regular basis. It's also over 2 years, as I expect Master E to have his own car by then and we'll be doing something different.

I factor in insurance (in my case significant, as the company pick up the bill for the "first responder" insurance I need), maintenance, peace of mind (I have no off-street parking, for example, living in a twitten), no deposit to find, etc, and I can't beat it doing the deal privately.

WRT peace of mind, everything is handled for me. For servicing, the car is picked up and returned (essential when you live in the sticks), properly valeted (OK, usually standard with a Benz, but this applies to anything as it's part of the contract). New tyres - phone up and get them done. Snapped badged, keyed panels (as has happened with the current car) - one phone call and it's taken care of. RFL disc arrives in the post, comprehensive european breakdown cover (not that I've ever neeed it, but nice to know it's there).

It might not be the best choice for everyone, but there is often a blanket "taking the allowance is best" view that should be challenged based on personal circumstance. As it stands, come June/July I'll have a new car and will be £200/mth better off then I am at the moment (or a shade less if I decide to opt for the XF Sport). As is often said on this forum, it's the cost to move that counts.

 

[Rory]

You are only taxed on it if you take it home and use it for private mileage. If the car is based on a business site, and used exclusively for work, it is simply a business tool and nobody is taxed.

Well, that's a bit of a can of worms. The key thing is, "is the car available for private use?" If it is, then you pay tax on it.
Companies are very reluctant to say the car isn't available because they'll be in a lot of trouble if you do then use it.

It strikes me that the key to whether it is better to take company car or opt out / cash alternative, is forecast private mileage???

There's really no black and white answer, except that for a 20% tax payer, it's usually a no-brainer to take the company car. Something that doesn't cost too much and with low emissions could only cost £30/mth in tax at 20% - less than most people would pay just for insurance.

Private mileage isn't really an issue as few employers pay for it now as it doesn't make a lot sense, tax wise. Probably the bigger issue is how many business miles you do. It tends to make sense to opt out if you do 10-15K as you get a fair amount of mileage allowance, but you're not doing so many miles that you destroy the value of the car.

One reason to opt out is if you want a car that isn't available as a company car - perhaps a people carrier etc.

 

[Rory]

I had a quick look at the Lex deals posted elsewhere this morning - E220 sport @ £311+vat. So that's £370 once the VAT is on. I've added on a few extras such as COMAND, heated rear seats, Harmon Kardon, etc, and I get to a base price of about £41k (working from an E250 AG).

Thanks. I opted out so I'm well versed in the arguments but I just thought your figures looked high.

Adding options really bumps up the monthly cost - a neighbour of mine switched from Mercedes to Lexus, where everything was standard, a few years ago as he was fed up re-buying the options everytime he switched cars.

 

[wemorgan]

Sorry if it's already been mentioned, but one benefit of taking the cash benefit is the ability to 'upgrade' to a more expensive when new, but second-hand car. Quite a nice treat for someone being offered a basic allowance for a new Focus, but instead buys a 3 year old C-class, for example.

Swings and roundabouts for sure.

 

[Rory]

Sorry if it's already been mentioned, but one benefit of taking the cash benefit is the ability to 'upgrade' to a more expensive when new, but second-hand car. Quite a nice treat for someone being offered a basic allowance for a new Focus, but instead buys a 3 year old C-class, for example.

When it was pushed through our company, exactly the opposite happened - middle managers who'd had A6 + 5 Series went out and bought used Peugeot 307 diesels etc!

 

[wemorgan]

I guess they were they high rate tax payers looking to make a nice saving on their tax bill?

It shows we think the grass is greener the other side of the fence.

I mostly enjoy changing my cars often, so if I was ever offered a company car allowance I think I'd take the cash. The same car for 2-5 years would bore me.

 

[st4]

When it was pushed through our company, exactly the opposite happened - middle managers who'd had A6 + 5 Series went out and bought used Peugeot 307 diesels etc!

They'll get a big allowance and will trouser the difference...

 

[Dieselman]

They'll get a big allowance and will trouser the difference...

Seen that done with people taking £1300 a month allowance then driving average and sometimes old cars.

 

[wemorgan]

I wondered who all the W210 owners were

 

[Rory]

Seen that done with people taking £1300 a month allowance then driving average and sometimes old cars.

Never heard of anyone getting that much - our guys were on £750 and from memory the highest level was £900.

I've changed jobs now (in fact the old firm doesn't exist anymore) and get less than that per month, but I do also get the full 45p/25p per business mile rate. The snag is I don't do many miles!

 

[Palfrem]

Haven't had a company car for years - since they took away the higher mileage allowance.

Have managed to always have a decent car (always buy a 3 year old AUC) on monthly allowance and mileage rates.

Managed to run a CL500 at one stage.

Now have a C280, paid for and still under MB warranty.

Bear in mind HMRC mileage rates and cost of diesel. Consiider petrol please.

If your petrol car is 2 litres and above its 26p per mile diesel is 16p.

If my C280 averages 25 mpg at £6.09 per gallon, I "make" 2.5p per mile towards running costs, a diesel at 45 mpg at £6.54 one would only make 1.45 p

 

[Londonscottish]

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

That's what I've been doing for the last 12 years. Works for me

 

[Ricardo]

I've opted out recently bought the e class on a 2 yr pcp, had the choice I wanted for the family as the company couldn't/wouldn't give me (was all saloons which is no good)

It's £279 month on 38k per annum. Sure I need to factor in repairs and servicing etc, but the budget I have done sees me make money, as long as fuel costs stay sensible, as the firm pays 21p per mile and the Merc is currently at 16p

Sure I worry a little about this and potential costs. But can opt back in if I need to, but so far my tracker shows I am going to be doing 32k miles avg so may have some equity in the car at the end

Only issue I have is that they cap our car ages at 5 years old and I hope this car will be still as good at 120k and 5 years as it is today at 2.5 years and 56k miles

 

[craig1912]

Have always had a company car - currently have C250D sport. Was able to choose extras and very happy with it. Taxable benefit is £5800. Not having to worry about any expenses and geting a new car every three years is worth it for me.