BWM 5 SERIES - Comany Cars

Honest John Back Room » Motoring discussion
What is life like with your car? Let us know and win £500 in John Lewis vouchers | No thanks
View Threaded
Mon 30 Aug 2010 01:19
BWM 5 SERIES - Comany Cars - Whitey123

Hi - can anyone help me with me query below?

I am trying to work out how much I will pay per month as Benefit in Kind for a 5 series BMW shown below

I currently earn about 42k a year - and my Tax Allowance is £6475 - £5038 (BIK for the car) = £1,437 Tax free.

Therefore I can currently earn £37,400+£1,437 (=£38,837) before I pay the higher rate of tax (40%).

As I earn around £42k a year will I automatically pay the 40% BIK tax monthly fee?

Or will I pay the 20% BIK tax plus 40% of the difference between £38,837and the £42,000 I earn?

Does anyone know?

Make/Model

P11D Value Fuel MPG CO2 BIK % BIK £ Monthly Benefit in Kind tax payable by driver @ 20% Monthly Benefit in Kind tax payable by driver @ 40% BMW 5 SERIES DIESEL SALOON 520d SE 4dr £27,990 Diesel 57.6 129 18% £5,038.20 £83.97 £167.94
Reply | Report as offensive | Link
Mon 30 Aug 2010 01:38
BWM 5 SERIES - Comany Cars - rtj70

Since you earn around £42k you will probably be only just in the 40% tax bracket. Do you also have a pension that is tax deductable?

Anyway you will pay 40% only on the difference. You are right that you pay 40% on the income above the figure you give. Below that is 20% or 0% for the first £1437.

So if you have to pay up to add to your allowance to get this car, or have a pension, you taxable income will be lower still.

This car interests me too.

Reply | Report as offensive | Link
Mon 30 Aug 2010 17:15
BWM 5 SERIES - Comany Cars - Whitey123

Thanks!

I have a SMART pension which is taken out before I pay tax.

I would need to pay up from my allowance by £159 a month - so how will this effect my taxable income?

Richard.

Reply | Report as offensive | Link

It's FREE to list your classic car on Honest John Classics and promote it to thousands of classic car buyers, owners and enthusiasts on what is one the UK's biggest classic car sites.

Sell Your Classic Car For FREE