My boss is thinking of buying me a car outright instead of via contract hire.
If he buys a car over,say, 3 years old, does my tax liability change ?
If not, then presumably it is based on the current list value &co2 rating.
But what if the car is no longer made - what list price do I use ?
Anyone know any useful web sites which would explain this please.
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I think it has to be a classic over 15 years or something.
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Your tax liability will not change. The vehicles taxable benefit will be based on the list price of the car on the day before the car was first registered.
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So if he gives you a 1935 Austin 7 that will be £100.
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>>But what if the car is no longer made - what list price do I use ?
Try Wisebuyers.co.uk (hope this doesn't contravene the rules here)
they've usually got prices/specs for cars going back up to about 7-8 years,
failing that try the manufacturers website customer service contact telno.
>>Anyone know any useful web sites which would explain this please.
Type 'BIK' into Google & take your pick
(or the gubmint site , type 'hmrc' + 'BIK' should yield the right area of the HMRC.gov.uk site)
Also, any car pre-1998 or without an official CO2 output per km figure, will be rated
at 35% of list
'List' price is is the unadulterated full MRRP (so no reduction for Citroens!)
but excludes (for BIK purposes) delivery/first year road tax(if included)/regn./number plates
and is called the 'P11D' value.
btw - don't forget to add the price of any extras (or options) on the car, these sadly
keep thier 'worth' for BIK purposes too
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..should be 'their worth' of course.
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'List' price is is the unadulterated full MRRP (so no reduction for Citroens!) but excludes (for BIK purposes) delivery/first year road tax(if included)/regn./number plates and is called the 'P11D' value.
It is a minor point but you should include the delivery charge.
From HMRC:
"For the purposes of this calculator the 'list price of the car' is the total of the UK list price of the car on the day before the date of first registration, including VAT, car tax (where appropriate) and delivery charges, plus the list price of any optional accessories with the car when it was first made available, plus the price of any accessories added to the car after it was first made available (if they were added after 31 July 1993 and had a list price of £100 or more)."
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>>It is a minor point but you should include the delivery charge.
yes, I stand corrected.
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My boss is thinking of buying me a car outright instead of via contract hire.
Has he spoken to his accountant? It's probably a pretty bad idea to do what he's suggesting.
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not sure about the current rules - hmrc web site is your best bet - but there used to be a discount of 25% for cars over 4 years old. I think that the benefit is mainly the employer saving money on getting the car - you still pay lots of tax.
What is the reason for this ? get more car for the money ? Cut costs ?
you might be better running your own car and claiming the allowance.
otherwise the lease deals are quite good on the whole.
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you might be better running your own car and claiming the allowance.
With my 5k business miles a year and resultant expensive lease car, exactly what I did back in 2003. Saved a hill of expence, and with employer keen to reduce the cost of running their lease fleet and encourage drivers to leave it, got a 125% allowance in to the bargain. Add fuel taxed at 40% of actual cost instead of on a notional fixed value way above my actual annual driving, and it was a no brainer.
Good luck.
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I used to run my e-type as a company car.
As it was worth less than £15k, tax was based on it's original cost (£2799) minus 25% as it was more than 4 years old.
All the servicing, insurance, new crome wire wheels , re-covered leather seats etc was done as a company expense, i.e no tax paid by me + VAT back.
It's not often the tax man treats you so nicely :)
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The 25% reduction for older cars stopped when company car tax switched to the emissions based system.
Sweeping statement: Older cars generally have worse emissions, so there was no point in encouraging people to drive old cars.
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The poster with the E-type picked up on the usual point, but I'm not sure he made it quite clear - and i don't think (forgive me if I missed it) anybody else has.
You are taxed on the list price of your car, adjusted for CO2. The list price is the list price of the car when it was registered - so if a Fiesta cost £12,000 in 2003 and £13,000 on 2004 then a 2003 version is 'worth' £12k, and a 2004 version worth £13k. Glass's Guide will have list prices - available in your local library.
However, the list price of a MK ii Jaguar when new was maybe £1,000 (??). So the tax is as near as makes no difference nil.
This is PROVIDING the car is worth less than £15,000. If the car is worth over £15k, then it's current value is taken, instead of the list price. The MK ii Jag (unless 'modernised') is worth a shade under £15k, so fits the bill nicely.
Just beware of too many new leather seats, if that pushes the value over 15k.
Definitely one for a 'family' company unless your employer *REALLY* likes you.
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