Company car or cash?
Discussion
Hi all,
Looks as though we're going to be given the opportunity to hand back our company cars and take an allowance pretty soon. Be helpful to get some advice from anyone that has gone through the process before..
Current position
Tiguan R Line 2.0tdi DSG - company car
40% tax rate, paying around £440/month in tax
10k business miles (HMRC minimum pence per mile reimbursement)
5k private
Rumour has it that we'll be offered £600/month which isn't a great amount, but added to the BIK savings gives me around £800 a month net (I think).
Obviously financially, I'd be in a better position taking the cash but the company car has benefits, no worry about servicing, tyres etc.
Thoughts would be welcome
Looks as though we're going to be given the opportunity to hand back our company cars and take an allowance pretty soon. Be helpful to get some advice from anyone that has gone through the process before..
Current position
Tiguan R Line 2.0tdi DSG - company car
40% tax rate, paying around £440/month in tax
10k business miles (HMRC minimum pence per mile reimbursement)
5k private
Rumour has it that we'll be offered £600/month which isn't a great amount, but added to the BIK savings gives me around £800 a month net (I think).
Obviously financially, I'd be in a better position taking the cash but the company car has benefits, no worry about servicing, tyres etc.
Thoughts would be welcome
Are there any restrictions on what you can buy if you take the money?
We have the following to adhere to,
Can't be older than 6 years
Has to have less than 150k miles
Limit on emissions depending on which group you are in
Has to have four seats
No vans
No convertibles
No motorbikes
I'd ask about any other rules before deciding.
We have the following to adhere to,
Can't be older than 6 years
Has to have less than 150k miles
Limit on emissions depending on which group you are in
Has to have four seats
No vans
No convertibles
No motorbikes
I'd ask about any other rules before deciding.
myvision said:
Are there any restrictions on what you can buy if you take the money?
We have the following to adhere to,
Can't be older than 6 years
Has to have less than 150k miles
Limit on emissions depending on which group you are in
Has to have four seats
No vans
No convertibles
No motorbikes
I'd ask about any other rules before deciding.
Just waiting on the final rules but expect them to follow a similar path as above. I probably wouldn't run anything too old anyway. Would really like a Tesla but not sure it would make much financial sense..We have the following to adhere to,
Can't be older than 6 years
Has to have less than 150k miles
Limit on emissions depending on which group you are in
Has to have four seats
No vans
No convertibles
No motorbikes
I'd ask about any other rules before deciding.
RayDonovan said:
Just waiting on the final rules but expect them to follow a similar path as above. I probably wouldn't run anything too old anyway. Would really like a Tesla but not sure it would make much financial sense..
Having recently come out of the company scheme a few points:1. Why on earth have you got a diesel! Can you not swap for an EV or PHEV in the company scheme, that will save you £300 a month in tax.
2. £600 is not a lot of money at all, £350 after deductions, then insurance will be 20% of that, tyres & maintenance 15% of that
I reckon I just break even on £900 a month.
JD said:
RayDonovan said:
Just waiting on the final rules but expect them to follow a similar path as above. I probably wouldn't run anything too old anyway. Would really like a Tesla but not sure it would make much financial sense..
Having recently come out of the company scheme a few points:1. Why on earth have you got a diesel! Can you not swap for an EV or PHEV in the company scheme, that will save you £300 a month in tax.
2. £600 is not a lot of money at all, £350 after deductions, then insurance will be 20% of that, tyres & maintenance 15% of that
I reckon I just break even on £900 a month.
JD said:
Having recently come out of the company scheme a few points:
1. Why on earth have you got a diesel! Can you not swap for an EV or PHEV in the company scheme, that will save you £300 a month in tax.
2. £600 is not a lot of money at all, £350 after deductions, then insurance will be 20% of that, tyres & maintenance 15% of that
I reckon I just break even on £900 a month.
It's not as simple as that. 1. Why on earth have you got a diesel! Can you not swap for an EV or PHEV in the company scheme, that will save you £300 a month in tax.
2. £600 is not a lot of money at all, £350 after deductions, then insurance will be 20% of that, tyres & maintenance 15% of that
I reckon I just break even on £900 a month.
£350 after deductions maybe, but he's also saving £440 per month on the tax bill for the company car. Then there might also be a mileage rate for business miles from the company - if it's not 45p per mile then he can claim tax relief on the underpayment.
You need a complex spreadsheet to work out the full picture (I have one, but its probably out of date).
rlg43p said:
JD said:
Having recently come out of the company scheme a few points:
1. Why on earth have you got a diesel! Can you not swap for an EV or PHEV in the company scheme, that will save you £300 a month in tax.
2. £600 is not a lot of money at all, £350 after deductions, then insurance will be 20% of that, tyres & maintenance 15% of that
I reckon I just break even on £900 a month.
It's not as simple as that. 1. Why on earth have you got a diesel! Can you not swap for an EV or PHEV in the company scheme, that will save you £300 a month in tax.
2. £600 is not a lot of money at all, £350 after deductions, then insurance will be 20% of that, tyres & maintenance 15% of that
I reckon I just break even on £900 a month.
£350 after deductions maybe, but he's also saving £440 per month on the tax bill for the company car. Then there might also be a mileage rate for business miles from the company - if it's not 45p per mile then he can claim tax relief on the underpayment.
You need a complex spreadsheet to work out the full picture (I have one, but its probably out of date).
RayDonovan said:
On the first point, no other reasonable options - certainly no EV or PHEV on the list. Point #2, agree. Feels like opting out could save some money, but not that much (unless I really downgrade)
What on earth? no PHEV options? That is so seriously punitive to the employees it almost feels malicious in intent? especially since you are such a low mileage user!What's your current company car budget?
I’m in a similar position as the company car goes back in Jan.
For what I can see, the benefit is to have a new car every 4 years with no bills to worry about.
Downside is that I’m only getting 11p per mile, I’m paying a ton of tax it per year!!!
When moving to privarlo owned, I’ll be receiving 25p a mile plus I can claim the extra 19p from HMRC. Monthly tax outgoing will be lower and will receive £380 net a month.
I haven’t done any maths but, I’m sure I can run a car at less than £380 a month, apart from the initial spent, I should be in quids in at the end.
Our company doesn’t seem to be too strict on the 5yrs old under 60K miles policy therefore I’m planning to buy something outright. Would t want to spend any saving Ina lease.
For what I can see, the benefit is to have a new car every 4 years with no bills to worry about.
Downside is that I’m only getting 11p per mile, I’m paying a ton of tax it per year!!!
When moving to privarlo owned, I’ll be receiving 25p a mile plus I can claim the extra 19p from HMRC. Monthly tax outgoing will be lower and will receive £380 net a month.
I haven’t done any maths but, I’m sure I can run a car at less than £380 a month, apart from the initial spent, I should be in quids in at the end.
Our company doesn’t seem to be too strict on the 5yrs old under 60K miles policy therefore I’m planning to buy something outright. Would t want to spend any saving Ina lease.
JD said:
RayDonovan said:
On the first point, no other reasonable options - certainly no EV or PHEV on the list. Point #2, agree. Feels like opting out could save some money, but not that much (unless I really downgrade)
What on earth? no PHEV options? That is so seriously punitive to the employees it almost feels malicious in intent? especially since you are such a low mileage user!What's your current company car budget?
I think it's about £550/month that includes full maintenance on 20k PA / 3 years. One of the issues is that the budget never kept pace with recent price rises so the choice has been getting worse and BIK getting more expensive.
RayDonovan said:
Indeed, hence the change now.
I think it's about £550/month that includes full maintenance on 20k PA / 3 years. One of the issues is that the budget never kept pace with recent price rises so the choice has been getting worse and BIK getting more expensive.
You can get a Cupra Formenter PHEV for £560.I think it's about £550/month that includes full maintenance on 20k PA / 3 years. One of the issues is that the budget never kept pace with recent price rises so the choice has been getting worse and BIK getting more expensive.
Or plenty of hatchbacks, or Skoda octavia estate Cupra Leon estate for less.
I opted out last year, I had gone from a PHEV with fuel card for about £150 a month to a new scheme which was a PSA manufacturer scheme (great for tax and new car every 6k miles) COVID supply chain meant less choice and with 3 kids it was becoming a pain so took the money £600 a month.
My man maths worked that out after taxes I was clearing £450.
I got a 3% loan for 25k over 5 years (£453) and bought a T6 transporter, work weren't overly happy but it fitted our criteria of 5 doors and 4 seat minimum.
My money pays for the loan and I pay insurance (£400 a year) and serving etc. I claim about £1k a year from the mileage difference so put all fuel and car spends on a 0% card and pay my monthly expenses of it then at the end of the tax year I make up what's missing after my rebate last year about £100.
So I do about 8k miles in total, I paid £100 for all my fuel and van last year, loan is being paid by work so could easily sell for a profit now.
This year I won't be as well off as it need 4 tyres, major service and brakes all round, I still like the choice of having what I like.
Having had company cars for 20 years it was a shock at first but as my company is now all electric I can't see myself going back to a company car unless insurance / maintenance gets ridiculous.
My man maths worked that out after taxes I was clearing £450.
I got a 3% loan for 25k over 5 years (£453) and bought a T6 transporter, work weren't overly happy but it fitted our criteria of 5 doors and 4 seat minimum.
My money pays for the loan and I pay insurance (£400 a year) and serving etc. I claim about £1k a year from the mileage difference so put all fuel and car spends on a 0% card and pay my monthly expenses of it then at the end of the tax year I make up what's missing after my rebate last year about £100.
So I do about 8k miles in total, I paid £100 for all my fuel and van last year, loan is being paid by work so could easily sell for a profit now.
This year I won't be as well off as it need 4 tyres, major service and brakes all round, I still like the choice of having what I like.
Having had company cars for 20 years it was a shock at first but as my company is now all electric I can't see myself going back to a company car unless insurance / maintenance gets ridiculous.
dema said:
I’m in a similar position as the company car goes back in Jan.
For what I can see, the benefit is to have a new car every 4 years with no bills to worry about.
Downside is that I’m only getting 11p per mile, I’m paying a ton of tax it per year!!!
When moving to privarlo owned, I’ll be receiving 25p a mile plus I can claim the extra 19p from HMRC. Monthly tax outgoing will be lower and will receive £380 net a month.
I haven’t done any maths but, I’m sure I can run a car at less than £380 a month, apart from the initial spent, I should be in quids in at the end.
Our company doesn’t seem to be too strict on the 5yrs old under 60K miles policy therefore I’m planning to buy something outright. Would t want to spend any saving Ina lease.
I don't think you can claim 19p/business mile from HMRC but only tax relief on that amount? For what I can see, the benefit is to have a new car every 4 years with no bills to worry about.
Downside is that I’m only getting 11p per mile, I’m paying a ton of tax it per year!!!
When moving to privarlo owned, I’ll be receiving 25p a mile plus I can claim the extra 19p from HMRC. Monthly tax outgoing will be lower and will receive £380 net a month.
I haven’t done any maths but, I’m sure I can run a car at less than £380 a month, apart from the initial spent, I should be in quids in at the end.
Our company doesn’t seem to be too strict on the 5yrs old under 60K miles policy therefore I’m planning to buy something outright. Would t want to spend any saving Ina lease.
At a previous company I worked for, I used to use the allowance(about 4-500 a month) to cover my own lease cars rather than a company car, however when I was looking for my next car about 4-5 years ago, I was test driving a bunch of new cars and struggling to find anything I liked (I also really wanted an old E39 5 Series).
The company had rules, one being that the car had to be newer than 5 years old, luckily though, I was very good at my job, so when I had a quiet word with the sales director if he’d be ok with me having an 18 year old BMW, he okay’d it, so my allowance paid for it in less than a year and I just banked the allowance. It turned out to be the perfect car for turning up at customer offices in, smart enough to be respectable but old enough to not put peoples noses up.
I also used to work with someone who took the allowance and leased the cheapest car he could find that fit within company rules, then used the remaining majority of it to pay for his finance payments on a 911
The company had rules, one being that the car had to be newer than 5 years old, luckily though, I was very good at my job, so when I had a quiet word with the sales director if he’d be ok with me having an 18 year old BMW, he okay’d it, so my allowance paid for it in less than a year and I just banked the allowance. It turned out to be the perfect car for turning up at customer offices in, smart enough to be respectable but old enough to not put peoples noses up.
I also used to work with someone who took the allowance and leased the cheapest car he could find that fit within company rules, then used the remaining majority of it to pay for his finance payments on a 911
It's the company "rules" which often make these cash instead of car schemes often unattractive.
When I was in a similar situation I would only agree to giving up the car on the basis that the rules were dropped.
I see little incentive in getting part of my pay in a form which my employer has say over how I spend it.
When I was in a similar situation I would only agree to giving up the car on the basis that the rules were dropped.
I see little incentive in getting part of my pay in a form which my employer has say over how I spend it.
From a financial point of view company EVs are usually the better option.
But in your situation I would take the allowance.
An allowance gives
you freedom.
An example in our firm, 2 people with £600 per month allowance.
One runs 5 year old 320d, another 2 year old AMG C43 cab.
Both claim 25p per mile + 20 from HMRC upto 10k business mile.
One makes a bit every month, the other definitely doesn't :-)
But in your situation I would take the allowance.
An allowance gives
you freedom.An example in our firm, 2 people with £600 per month allowance.
One runs 5 year old 320d, another 2 year old AMG C43 cab.
Both claim 25p per mile + 20 from HMRC upto 10k business mile.
One makes a bit every month, the other definitely doesn't :-)
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