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Possibly been offered a job with a company car, of which I'd have a few to choose from... So thumbs up!
BUT... I'm now confused...
Trying to work out what I'd have to pay monthly on various different cars, I understand it has to do with the P11D value, and the % BIK. So for instance a car with an RRP of £20,000 with a BIK % of 20% would have a P11D value of £4,000... Am I correct?
Thing is, how does this P11D value then relate to monthly payments? This is where I'm stuck...
And what determines the % BIK that then determines the P11D value? Is that the CO2 emissions?
Cheers in advance...
[url= http://www.comcar.co.uk/newcar/companycar/taxcalc/g1select.cfm ]Try this[/url]
Should give you an idea.
[url= http://cccfcalculator.hmrc.gov.uk/CCF0.aspx ]http://cccfcalculator.hmrc.gov.uk/CCF0.aspx[/url]
You'd pay 25 or 40% tax on the 4000 benefit depending on your highest tax level. Could be worth looking at the cash alternative if there is one, unless you do super high personal miles then its an expensive way to own a car and you will usually pay close to the full value at new in 3 years in tax, loss of cash alternative and personal contributions
Ah right, think I've got it now...
So based on the BIK value, as a lower rate tax payer, I would pay 20% of that value annually... So divide it by 12, and I get to my monthly payments...
Cool
djg, cheers for the input. I asked about taking cash alternative, they said it's not something they'd normally do for a job where a vehicle is considered necessary. Besides, I don't have any cash for a deposit on a decent car myself right now anyway... Besides as a lower rate ta payer, it looks a lot more financially astute than for a higher rate tax payer (I think!), and I do a fair few personal miles too.
Don't get all misty eyed when choosing your new (company) car. Write a list of wants, and then go for the lowest (to you) cost - as you've said combination of value vs co2.
In my last role my 'benchmark' car was a 530d, but I got a petrol SRi Vectra instead, saving a packet on not just tax but getting a cash allowance as I'd saved the company lease-monies. The wants for me were; auto, fast-enough, CD, cruise, 5 seats. Economy was irrelevent for me as I got private-use fuel.
The difference in cash fed my MTB (XTR) habit 😆
djglover - not sure how you come to the conclusion that it's an expensive way to own a car? I have a company car, nothing flash but I get something new every 3 years. It costs me about £50-£60 a month in tax + personal fuel - how could I buy a new car for that?
Maverick - I'd get a Lexus if I were you BTW 😈
[i]djglover - not sure how you come to the conclusion that it's an expensive way to own a car? I have a company car, nothing flash but I get something new every 3 years. It costs me about £50-£60 a month in tax + personal fuel - how could I buy a new car for that?[/i]
Are you sure you've got your figures right...
woody if you didn't take the car would you not get a cash alternative? If not then your right it's best to take it but if so you could be getting £4k a year or more extra pay to sort a car out.
Pretty sure. The taxable benefit is about £3.5K and I'm a lower rate tax payer, so I'm paying tax of about £700 on that. I pay for my own fuel, but I get the insurance/servicing paid by work. Should I be paying tax on the servicing costs etc?
Try and avoid taking the private fuel option if offered as the tax on this is very high and will rarely be a good thing unless you do massive private mileage
If you're claiming back company mileage on a company owned car, most companied will stick to [url= http://www.hmrc.gov.uk/cars/advisory_fuel_current.htm ]gov guidelines[/url]
I find that getting a car [diesel] just over 2ltr pays you back a lot more in mileage allowance for very little difference in MPG compared to something just under 2ltr - currently around 25% more money
yeah private fuel is not a great benefit - you'd need to be doing some serious mileage to make it work.
I pay about £50 extra in tax a month for my company car. I like it, it's hassle free and nice to know that if anything goes wrong the company picks up the tab, and I couldn't run a car of the same quality for that much.
[i]Pretty sure. The taxable benefit is about £3.5K and I'm a lower rate tax payer, so I'm paying tax of about £700 on that. I pay for my own fuel, but I get the insurance/servicing paid by work. Should I be paying tax on the servicing costs etc? [/i]
But surely the benefit moves you up the tax scale, or are you so badly paid...
Private fuel is easy, work out the tax - is it less than private (including commuting) mileage - if so have it.
br - the benefit is deducted from your tax code, not added to your salary. And I get paid well enough, thanks.
Don't get all misty eyed when choosing your new (company) car. Write a list of wants, and then go for the lowest (to you) cost - as you've said combination of value vs co2.In my last role my 'benchmark' car was a 530d, but I got a petrol SRi Vectra instead, saving a packet on not just tax but getting a cash allowance as I'd saved the company lease-monies. The wants for me were; auto, fast-enough, CD, cruise, 5 seats. Economy was irrelevent for me as I got private-use fuel.
The difference in cash fed my MTB (XTR) habit
Don't worry, I know what I'm doing in that regard. Think to be fair there's likely to be a limit on the purchase price of the car, so certainly nicer Beemers are ruled out. Possibly a 1 series would come into the budget, but also I'm not sure it's even on the approved list.
Approved list consists of cars like Mondeos, Insignias, Accords, Focus', Civics, Mazda 6's etc etc...
For me the want is a Beemer... Always been a fan, have had 3 in the past now myself and I love rear drive. But unlikely to get one I think... So needs would come into play. Those being Space for at least one bike inside (so no saloons), diesel, 50mpg capability, manual, iPod connectability, fun to drive, air con, possibly cruise control. Currently on the approved list, liking the look of the Mazda 6 Estate and the Honda Accord Estate, though understand the Accord doesn't fair so well on company car tax.
djglover - not sure how you come to the conclusion that it's an expensive way to own a car? I have a company car, nothing flash but I get something new every 3 years. It costs me about £50-£60 a month in tax + personal fuel - how could I buy a new car for that?Maverick - I'd get a Lexus if I were you BTW
Yeah, but as others have said, you're probably forgoing £4-5k car allowance in your pocket for this also. I know I would/will be, but I've also been told that I'm unlikely to be allowed a car allowance as an alternative, so making the best out of the situation I might as well have a bloody nice car!
As stated above, I'm a Beemer man personally, though the Lexus IS220D is nice... But it's also a Saloon which rules it out for me... Oh, and I don't do Auto boxes anyway... 😉
Try and avoid taking the private fuel option if offered as the tax on this is very high and will rarely be a good thing unless you do massive private mileage
Don't worry, way ahead of you there... Figured it'd cost an arm and a leg in tax, so kinda pointless... Also why 50mph capability is a desire for me too as I do do a fair bit of private milage, and whilst I don't mind putting the fuel in, it would be nice to keep the private running costs low too.
I pay about £50 extra in tax a month for my company car. I like it, it's hassle free and nice to know that if anything goes wrong the company picks up the tab, and I couldn't run a car of the same quality for that much.
Likewise. Even if I got a car allowance, to be fair I'd probably not get approved credit for a lease at the moment, which means that I'd end up having to shell out as much as I could muster (probably £3-4k if I sold a bike or 2, which I don't want to do) on a 7-8 year old car with 100,000 miles on already. Not saying that's not fine, but it'd cost me more to run for sure...
Cheers again guys
Heres how it worked out for me on my last car
Taxable benefit was about 4.4K, so tax at higher rate was £1.8K a year
Loss of cash alternative = 3K NET a year
Total cost per year 4.8K
Cost over 3 year lease 14.4K! 😯 on a 20 odd K car
No thanks, bought a 3 year old car of the same model for 8K and pay for it myself please
Get a Toyota - I reckon they are going to be quite cheap this year.....