I have a dliemma - will be starting a new job soon. On offer is a \"Group 3\" company car. In the info I got with the job offer is a list of benchmark cars for that group, the Mondeo and Vectra of the subject line (1.8 GLX/GLS petrols or equivalent diesel). No mention of whether one is allowed to deviate from the benchmark, so I\'vew asked for clarification. Neither car really inspires me so I\'m wondering if the £5,001 annual car allowance would be a good idea.
Given that I am soon to become a father for the first time and that I will do very little business mileage would you go for what\'s on offer or take the £250 a month and see what that gets you ?
In the event of being given a choice of any new car in the Mondeo/Vectra price range I would probably have a Seat Leon 110bhp diesel or the new diesel Civic.
Matthew Kelly
No, not that one.
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I have a similar choice, company car or rather low (by today's standards) allowance. I switched to allowance five years ago and have never looked back. Main reasons for switching were:
1) Ability to choose whatever car I want (within reason)
2) Ability to change it when I get fed up with it
3) Concern over future tax levels for company cars
My employer has some (non-enforced) rules - must be less than 5 years old, 4/5 doors, suitable for occupancy by customers.
It's true to say that I cannot afford to run a brand new car. I'm now on a 4 year old Omega MV6, bought a year ago at the auctions. Normally would keep a car for no more than 2 years, but as I like this one and mileage is low I might hang on for 3 and pocket the allowance for a year.
I reckon the costs and revenue about balance over a year. The obvious killer can be maintenance - tyres @ £360 a set make me a little more cautious about how I drive (no bad thing).
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Just be a little careful with your car insurance.
The usage cover required depends on quite a tight definition of exactly what you do with it.
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I agree with the opinion from smokie.
try www.cashorcar.com
Are you aware of the tax relief on business miles, this can be claimed regardless of whether your employer pays a mileage allowance and will probably be the deciding factor in "cash or car"
I chose the cash. I cant be "paying" (it is your money at the end of the day) for a nackered (after 2 years 60000 miles) car that I am locked into. You end up driving the remaining 2 years with a car you hate.
I like to have the option to choose what I want.
When you have a company car, try to get simple faults fixed. The dealers know you are a captive audience and are useless. In particular Vauxhall dealers.
You need to allow for private fuel also, if your employer pays this. But remember you will pay at least £500 pa. in fuel tax for personal use. You can get a lot of miles from this.
Please keep asking if you have any particular questions.
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Keith,
I wonder if you could advise me on the following:-
My son has just been given a company car. It is a 2000 Y(possibly2001) Vectra 1.8 GLS 4 Door petrol. He has private use of the car and obviously uses it for work - he is an Estate Agent.
He does not do high business mileage and others in the office use it for work. He pays for all petrol and claims back a nominal allowance for business miles(12p).
I have followed the links on the FAQ on this site and I believe the CO2 emissions are 178gm/Km but am not certain that is correct. I also do not know how they calculate the value of the car.
Anyway he has just had a tax coding that reduces his code by £5950. Reading the Links it seems to me that it should be 17% of the cars value which I guess was in the order of £15K new. This would make it an approx £2550. adjustment to his Tax code.
Or have I got it completely wrong?
Thanks
C
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Cardew,
It seems odd that he pays for all petrol and claims 12p per business mile. To be honest I dont know how this works. I am used to having the company pay for all fuel incl private. You then pay extra tax for having private fuel.
Some people have opted out of private fuel with my company. The ratio of private miles to business miles is calculated and the amount spent on private fuel is calculated pro rata from the total fuel spend. The company then deducts private fuel directly via wages.
www.cashorcar.com will give you insight.
£5950 off the tax code seems way high. The 17% you quote seems closer to the truth.
The list price that the tax is based upon is the manufacturers list price that manufacturer submits to the inland revenue, the cost of any extras is added to this I believe.
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I get all fuel paid by the company. I am therefore not allowed to claim under the Revenue mileage code, as the per mile figure you can claim includes an allowance for fuel.
The car is my own. By my understanding I am allowed to claim as follows:
assuming 60% of mileage is business miles (not including home to office mileage which is inadmissible)
I can claim 60% of all car running expenses (service, tax, MOT)
I can also clam depreciation at 30% per annum of purchase price over three years. At sale of the car I can make a balancing claim to take account of being over or under actual sale price (eg if I buy for £10k after 1 year its value is £7k after 2 years £4.9k after 3 years c£3.5, if I sell for £3k then the taxman owes me, if I sell for £4k then I owe the taxman)
Regarding the fuel you take your private spend as a proportion of the total fuel bill and declare it as a taxable benefit on your tax return (eg I spend £3k, 60% business, 40% of £3k is £1200 taxable benefit).
I think that covers it. This has been built up over a number of years being on this scheme, and advice from the Tax Office who have been very helpful.
One thing you cannot claim is AA/RAC (breakdown) insurance as this is somehow deemed to be membership of a club which is not tax deductible.
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Why not get one of the many four door pickups ,they go well plenty of room and I believe no tax
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Why not get one of the many four door pickups ,they go well plenty of room and I believe no tax
I have read elsewhere that the Inland Revenue are tightening up on "double cabs" and won't accept them as a van (the basis of the low, not no, tax) unless you have a legit business reason for needing a pick up - like because you do deliveries in it or something.
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Matt
I went through this some years ago and ended taking the money. It depends on how you view the cars, if you want a nice shiney new one that will be 4 years old before you can change, take the car. Otherwise work out what else you can have and still leave say £100 a month in your pocket. If you always buy new cars personally then maybe you will want the car, if like me you run rather less than new the money comes in handy elsewhere, such as a motorcylcle. Dont get the Mondeo though, thinking about it dont get the Vectra either.
Hope that makes it clear
Bill
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