Hi,
Sorry for the long post but here goes.
I?m just looking for a bit of advice regarding a new car that we have been offered by our employer. By way of background we work in a team of four and travel about 65 miles each way to work, on a four on four off shift system. We currently share the driving between three of us, with the other them member making his own way to work. All motoring costs are down to each individual and each uses their own cars.
Our employer has offered to give us a car to be shared between all four of us .They would buy the car but we would all be jointly responsible for all other costs e.g. tax, insurance, maintenance. At this stage I do not know how long we would have to keep the car but I would think it would be about two years.
It looks like the car will be a Ford Focus 1.6 Tdci, about 12 months old. We will jointly do about 30,000 miles pa, mainly on quiet motorways.
Coming to the point, can anyone see any pitfalls re insuring it or anything else? Three of us currently drive older cars e.g. 01 reg and one has a 56 plate.
Do you think it is a financialy worth it as we are thinking of agreeing as it will save our cars wear and tear etc.
Thanks
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I guess the immediate question will be one of potential company car tax liability. That'll depend on where the car is kept overnight, though the subject of 4 people effectively 'sharing' one car might flummox the IR!! On the other hand if you are just being given the car there is likely to be an income tax liability, but again having it shared by 4 people complicated matters I'd think...
Just my thoughts though...
Peter
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maybe someone else can clarify, but wont that class it as a company car, which would render you liable for Benefit In Kind (BIK). Off the top of my head, BIK on that would be about £600 per annum(correct me if im wrong!) so about £150 per person. Not sure if you paying towards the upkeep makes a difference or not.
Apart from that sounds good - Certainly more environmentally friendly. But i dont quite understand the shift bit. Am i right that three of you car share, using each persons car on different days, apart from the antisocial one who goes by themself?
Not sure about the financial though, because you would be liable for 1/4 of the share car costs on top of your current car costs. So you would only be better off if the cost of adding mileage to your own cars is greater than the 1/4 running costs you would be liable for. Matey with the 56 plate would therefore probably be better off.
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ahh, took too long to reply!
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I'm the one with 56 plate,Honda jazz.I've only recently got it from new
Three of us live close to each other and alternate driving between us.The other team member lives off our route and is nearer to work and drives himself for all his four shifts.
If we take the new car we will have to pick this person up and we will add about 40 mins to our overall daily travel time .We will just split the petrol cost by four.
Hope this clarifys it.
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I for got to add that we work on the night shift so for half the time the car will be at a place of employment.At other tomes on the team members drive.
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"Do you think it is a financially worth it "
Depends on what the alternatives are. Do you currently get compensated for the use of your own car(s)? Is there a cash alternative? Presumably your employer has done some arithmetic and should know the tax position. Joint responsibility for a car could be a bit of a minefield...
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"jointly responsible"
Joint accountability never works out IMHO.
It was true in the kitchen in student digs and many years later still the case in the office with washing up,
almost like a golden rule. To enter a car, its driving and repairs into that scenario is a potential nightmare. :)
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We appreciate there may be few problems.What i've suggested is that we all put £30 per month in an account .This will hopefully cover insurance,servicing,tyres,tax.brakes etc over the period.At the end of evry year waht we haven't spent is shared out.For petrol costs we will just share these out.eg take a turn to drive and the drivers puts the fuel in.
Anyone know if we can insure a car for four named drivers?
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We don't get any help toward travel costs at the moment other than a slightly enhanced basic contractual pay.The new vehicle would be used for virtually 100% personal commuting from our homes.For business there are compny vehicles available.
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Seems a very odd arrangement to me. Why has the employer suddenly had a fit of generosity - have they got this car kicking around with nothing to do?
Are they proposing to give you the car - ie hand over ownership? If not, then the employer remains responsible for it - they can't just devolve responsibility to you (especially jointly with others).
Might be better if they forget the car and just bung you a few bob extra and you carry on as you are.
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I tentavively understand that the car will be fully handed over to one employee per team,with the company not taking any future role.
I understand that this will take away any tax implications for our employer.They will be buying the cars in and do not have any to hand out that are "spare".
Possibly it may be better idf we all just given a non-contractual bonus of £??????? each year instead.Any ideas of a good figure.We thought maybe £800 net each.
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"I tentavively understand that the car will be fully handed over to one employee per team,with the company not taking any future role."
So assuming 40% tax rate payer and a £10k, the person getting the car will have to pay tax at 40% BIK. The company cannot just give away a car like this.
And have you (or they) even thought about insurance. It has to be in one person's name and then with names drivers. If the three of you take equal terms there is no main driver! I cannot see this working at all. And the tax is surely more complex than any of us have thought.
The only person to benefit is the fourth person who gets picked up and dropped off!
I'd forget this and ask for extra money in basic salary.
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It seems to be a complete minefield in all respects.We are all basic rate tax payers by the way.
Regarding the insurance we could always keep it down to two drivers only.
I fully agree that the fourth member of the team will benefit the greatest for doing the least.
I think the basic salary uplift may not work as we do a fair bit of overtime each year(about 150hrs)which will be also uplifted at 1.5 times basic pay.Thats why I thought of a straIght non-contractual bonus
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I still don't understand why the employer has offered this - what are they trying to achieve?
Has someone complained about the difficulty or cost of getting to work?
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From my experience of IR/company cars/ pool cars - this car will be regrded as BIK-able, for the simple reasons
that it will have to be taken 'home' by someone & it's not being used on company business, just transport to-from work (which is personal use)
Your employer could risk declaring it as a 'pool' car, but runs the risk (as do you & colleagues) of penalty if the IR
decide to investigate or clarify its status. Imho, it's not worth the hassle
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Hi.sorry I've not posted but I've been away from the office.I feel this offer has been made by our employer as a couple of years ago we relocated our office.As motoring costs have risen the long commute is costing us a fair bit in vehicle costs etc.Our previous office was quite close to the homes of three of us.
I think the solution offered by our employer may appear cost effective on the surface but may have a lot of hidden pitfalls.
I've tried getting three of us insured on the car and quotes are coming in at circa £1100 as we can't have NCB on this new car and our own cars.PLus we need to include some business miles just in case we have use in works tims(very rare but you never know)
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Having that many drivers on a policy is a nightmare, the tax issues are a nightmare, the responsibility for ownership etc a nightmare.
The long and short is the company seems happy to spend some money to keep you on. Ask for an "allowance" which is equal to the cost of the car, divided by four, over the write-off period of the car.
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Exactly what a few of us have been thinking.A non contractual yearly bonus seems to work so much easier for all concerned.Obviously we will have to taxex and pay NI on it but we can live with that.
If I've got it right our employer will just have to pay Employers NI contributions on the bonus.
If the car was fully expensed by the company I think we would be more incined to go for it but even then the BIK rates would be a nightmare ,given the cars use
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Are the drivers on-call,? The car can then becomes the pool car that is driven by the on- call employee, the carriage of others is irrelevant, but that only works if the car is owned by the employer with no private use.
Get the money added to the basic, hopefully pensionable, salary, alter the overtime rate if it's a problem.
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There is normally no on-call element to our work.If we have to cover problems/absenteism at short notice this is normally done by overtime.There are three other teams working the same shift system that have been offred the same deal and we all tend to pull together in times of need.
I thought the non -contractual bonus could be the way to go so we were not seen as being "too greedy" and pushing our luck.Generally we are looked after very well by our employer and too not want to spoil the relationship in waht is a small family run firm.
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Hi,all.As can be seen I'm a bit of an infrequent poster but I thought I would give you all an update after all the advice I received.
Due to the rise in motoring costs my employer was looking at compensating us in some way.In the end(April 2008) they decided to give us all a pay rise of £1500 pa,fully pensionable and contractual.The overtime rate was frozen at last years rate though.
Not too bad a result though.
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