Car allowance vs company car net impact - why so difficult?!
Discussion
My boss has asked if I am interested in having a company car. No further details at this stage and given I have been told the policy is allowance only in the uk it is unlikely to come to fruition.
Before saying I am interested, I wanted to quickly see what the impact would be to my net salary. Having lost hours or days trying to work this out does anyone have a simple calculator where I can input car (i5 or similar), current allowance (£11k p.a.), salary etc to get a comparison?
My gut tells me that as I am getting screwed by tax (>£125k plus allowance bonus etc) that switching to a hybrid or electric company car may actually benefit me vs the allowance I get after the taxman has his share.
I have a 2020 X3M40i that has about £30k cash sitting in it also and do 6k miles per annum due to wfh. Of course if the options are a euro box then the BMW stays and I stop looking but good to have a quick understanding.
Edited to say persuading HR to offer a EV salary sacrifice could be step 2 if the car option is not available and good to throw that not the mix also.
Before saying I am interested, I wanted to quickly see what the impact would be to my net salary. Having lost hours or days trying to work this out does anyone have a simple calculator where I can input car (i5 or similar), current allowance (£11k p.a.), salary etc to get a comparison?
My gut tells me that as I am getting screwed by tax (>£125k plus allowance bonus etc) that switching to a hybrid or electric company car may actually benefit me vs the allowance I get after the taxman has his share.
I have a 2020 X3M40i that has about £30k cash sitting in it also and do 6k miles per annum due to wfh. Of course if the options are a euro box then the BMW stays and I stop looking but good to have a quick understanding.
Edited to say persuading HR to offer a EV salary sacrifice could be step 2 if the car option is not available and good to throw that not the mix also.
Go to salary calculator and do take home pay including car allowance - which I presume you know to make sure correlates.
Find BIK calculator - enter chosen car, total options and get tax implication or total benefit value.
Redo salary calc and take out car allowance and add in BIK (some allow you to enter taxable benefits to work out the difference)
Then factor in hidden costs such as maintenance/insurance etc as presumably that wont be yours to worry about.
Compare and decide
£4800 allowance on a 42% tax band for example really reduces to around £200 a month (ish) to buy, maintain and insure a car.
At least with BIK your not handing much of that over to the taxman if its an EV - Hybrids vary.
Find BIK calculator - enter chosen car, total options and get tax implication or total benefit value.
Redo salary calc and take out car allowance and add in BIK (some allow you to enter taxable benefits to work out the difference)
Then factor in hidden costs such as maintenance/insurance etc as presumably that wont be yours to worry about.
Compare and decide
£4800 allowance on a 42% tax band for example really reduces to around £200 a month (ish) to buy, maintain and insure a car.
At least with BIK your not handing much of that over to the taxman if its an EV - Hybrids vary.
Edited by halo34 on Monday 23 September 15:24
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