Company Cars Business and Private Mileage claims.

[Charles Morgan]

I hate the idea of an employer making a profit out of me. When I worked in the City my employer went on a Jihad about expenses, and introduced the policy that any losses on foreign currency drawn for a business trip would be borne by the employee for up to £5 (to save on processing expense claims) but any profit up to £5 could be kept by the employee. Given on FX you normally had a spread of about 5% it was a guaranteed Heads I win, tails you lose for the company. The idea that our employer could be so bloody grasping so annoyed everybody that instead of taking out small floats of £100 for trips (with a guaranteed loss of £5 if returned), people started drawing £200+ instead, guaranteeing a £10 loss to the employer. So they got the expense of a claim, and a loss. Dumb.

 

[gIzzE]

I think he would be better getting out of the company car scheme at the first opportunity, if he can

I don't!!

I think he's laughing, that car is £17k with no options at all, it will be worth an estimated 37% after 3 years and only 36k miles on it.
That is nearly £11,000 worth of depreciation alone, or £73 a week, before adding insurance, tax, tyres, servicing, fuel.
Ok, he will save £25 a week in BIK, which will probably cover the insurance and servicing, but what about fuel?
Will they pay him the 40p per mile for the 100 miles a week he does? That would give him £120 a month back and would help a bit, but I would rather the company take the risk on that sort of car personally.

 

[gIzzE]

Oh, and that £73 a week in depreciation is if he pays cash, if he uses finance he will need to add the interest.

 

[Benzowner]

The employer is not making a profit on the employee, he is cost cutting Not nice, but tmes are.

 

[flango]

I don't!!

I think he's laughing, that car is £17k with no options at all, it will be worth an estimated 37% after 3 years and only 36k miles on it.
That is nearly £11,000 worth of depreciation alone, or £73 a week, before adding insurance, tax, tyres, servicing, fuel.
Ok, he will save £25 a week in BIK, which will probably cover the insurance and servicing, but what about fuel?
Will they pay him the 40p per mile for the 100 miles a week he does? That would give him £120 a month back and would help a bit, but I would rather the company take the risk on that sort of car personally.

I cant really answer that depends on how much car allowance they will give him if he can opt out, you can then do the calc on that but knowing the company reasonably well I would expect £500 - £650 per month + he'll not get the BIK tax bill and they pay 15p per mile for personal cars used on business miles but I think you can claim the remainder back from HMRC

 

[wemorgan]

The benefit of opting out is that often you don't need to buy a brand new car. Though there can be rules about a car not being not older than 5-7 years this still opens up the nice posibility of owning a 2-3 year old car and either saving some money or upgrading to a more expensive model.

 

[gIzzE]

Don't get me wrong, I opted out years ago, I remember being told the BIK tax on my 535d sport touring was going to £680 a month, and the car was only costing £480 a month, I was better off by £200 a month just paying for it myself, it made absolutely no sense whatsoever.

It also means you can play the depreciation curve to, buy at 6-12 months old and sell at after 12 months, which is generally very cheap motoring to be in a new car with warranty.

 

[trainer]

I drive a 1.8 diesel and the HMRC guidelines are that companies can now pay 12p per mile for that engine size.

HM Revenue & Customs: Company cars - advisory fuel rates from 1 December 2010

 

[corned]

Might be worth your neighbour putting in a call to HMRC for clarification, just to see if, in their opinion, the proposed scheme still complies with HMRC guidelines.

Having said that, the response may be only something on the lines of 'as long as the Company pay over to us what is due, then what they decide to take off you for private mileage is purely between you and them'.