Two company cars
Discussion
Does anyone know how the tax man deals with the fact I have two company cars?
I have an eco-friendly diesel with lod space for when I am training as I need the space for boxes etc. As it is so economical I pay my own private fuel.
I also have something a little less economical for local work year round but which which I only use for private use in the summer as it is a soft top and has limited space. It does only about 3000 miles a year, so again I put my own private fuel in.
I know the car tax calculator will enable me to show the soft top wasn't available for private use for a specified period (in this case Oct-March) but has anyone had tow cars, and how does the tax man respond?
I have an eco-friendly diesel with lod space for when I am training as I need the space for boxes etc. As it is so economical I pay my own private fuel.
I also have something a little less economical for local work year round but which which I only use for private use in the summer as it is a soft top and has limited space. It does only about 3000 miles a year, so again I put my own private fuel in.
I know the car tax calculator will enable me to show the soft top wasn't available for private use for a specified period (in this case Oct-March) but has anyone had tow cars, and how does the tax man respond?
Flagging cars as pool cars is not enough. They must be "real" pool cars - i.e. available for use by more than one employee, only used for business purposes - ever, not available outside work hours. If the company operates from a director's home i.e. has no separate business premises, trying to argue that any of the cars used by the directors are pool cars is almost a non-starter.
I had thought about pool cars, but my neighbour tried that and the company acountant insisted they be kept at the company addess when not in use (which I don't think would wash with HMIT as we work from home). Also, 2 out of our 3 employees can't drive! My thinking is that I can't drive two cars at once and nobody else in the company can drive them so they can't be available at the same time. I supooose I could formaly designate time when I will be using each vehicle, but I am not sure that gets me out of the tax net..
Resurrecting this post a couple years on......looking for advice and I am new to the forum....
I am driving my own car for business miles about 10K per year, and the employer pays me a car allowance of £6k in salary to help pay for the car. The £6k gets taxed and NI as salary so I get less than 3K net. However I get 19 p per mile from employer for business mileage, and I claim mileage relief from hmrc on the difference of 19p and 45p on self assessment.That saves me approx £1300 per year in tax and NI.
So now the employer is offering a salary sacrifice EV scheme. I would still receive the £6k car allowance, and I would sacrifice £8K per year in my gross salary. I would save 40% in tax and 12 % in NI contributions on the 8K. I will have to pay the BIK which is £500 per year(2% this year on a full EV)
My question is could I still claim the mileage tax relief of the difference between 5p and 45 p per mile, on this car?
I am driving my own car for business miles about 10K per year, and the employer pays me a car allowance of £6k in salary to help pay for the car. The £6k gets taxed and NI as salary so I get less than 3K net. However I get 19 p per mile from employer for business mileage, and I claim mileage relief from hmrc on the difference of 19p and 45p on self assessment.That saves me approx £1300 per year in tax and NI.
So now the employer is offering a salary sacrifice EV scheme. I would still receive the £6k car allowance, and I would sacrifice £8K per year in my gross salary. I would save 40% in tax and 12 % in NI contributions on the 8K. I will have to pay the BIK which is £500 per year(2% this year on a full EV)
My question is could I still claim the mileage tax relief of the difference between 5p and 45 p per mile, on this car?
budha said:
Resurrecting this post a couple years on......looking for advice and I am new to the forum....
I am driving my own car for business miles about 10K per year, and the employer pays me a car allowance of £6k in salary to help pay for the car. The £6k gets taxed and NI as salary so I get less than 3K net. However I get 19 p per mile from employer for business mileage, and I claim mileage relief from hmrc on the difference of 19p and 45p on self assessment.That saves me approx £1300 per year in tax and NI.
So now the employer is offering a salary sacrifice EV scheme. I would still receive the £6k car allowance, and I would sacrifice £8K per year in my gross salary. I would save 40% in tax and 12 % in NI contributions on the 8K. I will have to pay the BIK which is £500 per year(2% this year on a full EV)
My question is could I still claim the mileage tax relief of the difference between 5p and 45 p per mile, on this car?
In general, the amount you are sacrificing is considered payment towards the car so reduces the taxable benefit. I would suggest it may be better for you to take the money and lease an EV yourself, if that is what you want. Assuming £40k for the EV then 2% BIK is £800 per year, more than covered by the £8K you pay towards it. It is a while since I dealt with BIK, but, the £800 needs to be visible somewhere to avoid paying the BIK.I am driving my own car for business miles about 10K per year, and the employer pays me a car allowance of £6k in salary to help pay for the car. The £6k gets taxed and NI as salary so I get less than 3K net. However I get 19 p per mile from employer for business mileage, and I claim mileage relief from hmrc on the difference of 19p and 45p on self assessment.That saves me approx £1300 per year in tax and NI.
So now the employer is offering a salary sacrifice EV scheme. I would still receive the £6k car allowance, and I would sacrifice £8K per year in my gross salary. I would save 40% in tax and 12 % in NI contributions on the 8K. I will have to pay the BIK which is £500 per year(2% this year on a full EV)
My question is could I still claim the mileage tax relief of the difference between 5p and 45 p per mile, on this car?
On sacrifice I would suggest it would be no car allowance and a sacrifice of £2k, rather than a sacrifice of £8k and keep the allowance. The allowance is towards a car you provide. The £2k (at 40%) is £800 to cover the BIK.
As regards the mileage I believe the Govt. ppm rate is standard across all types of car and is the 45p for the first 10k miles, 25p thereafter so, yes, you could claim the difference back against tax (not NI)
Interestingly with 1kWh of electricity costing around 30p and a car covering around 3 miles per kWh you would need 10ppm to cover it. Much more if charging at public chargers. Also you would likely need to install a proper charger at home.
MustangGT said:
budha said:
Resurrecting this post a couple years on......looking for advice and I am new to the forum....
I am driving my own car for business miles about 10K per year, and the employer pays me a car allowance of £6k in salary to help pay for the car. The £6k gets taxed and NI as salary so I get less than 3K net. However I get 19 p per mile from employer for business mileage, and I claim mileage relief from hmrc on the difference of 19p and 45p on self assessment.That saves me approx £1300 per year in tax and NI.
So now the employer is offering a salary sacrifice EV scheme. I would still receive the £6k car allowance, and I would sacrifice £8K per year in my gross salary. I would save 40% in tax and 12 % in NI contributions on the 8K. I will have to pay the BIK which is £500 per year(2% this year on a full EV)
My question is could I still claim the mileage tax relief of the difference between 5p and 45 p per mile, on this car?
In general, the amount you are sacrificing is considered payment towards the car so reduces the taxable benefit. I would suggest it may be better for you to take the money and lease an EV yourself, if that is what you want. Assuming £40k for the EV then 2% BIK is £800 per year, more than covered by the £8K you pay towards it. It is a while since I dealt with BIK, but, the £800 needs to be visible somewhere to avoid paying the BIK.I am driving my own car for business miles about 10K per year, and the employer pays me a car allowance of £6k in salary to help pay for the car. The £6k gets taxed and NI as salary so I get less than 3K net. However I get 19 p per mile from employer for business mileage, and I claim mileage relief from hmrc on the difference of 19p and 45p on self assessment.That saves me approx £1300 per year in tax and NI.
So now the employer is offering a salary sacrifice EV scheme. I would still receive the £6k car allowance, and I would sacrifice £8K per year in my gross salary. I would save 40% in tax and 12 % in NI contributions on the 8K. I will have to pay the BIK which is £500 per year(2% this year on a full EV)
My question is could I still claim the mileage tax relief of the difference between 5p and 45 p per mile, on this car?
On sacrifice I would suggest it would be no car allowance and a sacrifice of £2k, rather than a sacrifice of £8k and keep the allowance. The allowance is towards a car you provide. The £2k (at 40%) is £800 to cover the BIK.
As regards the mileage I believe the Govt. ppm rate is standard across all types of car and is the 45p for the first 10k miles, 25p thereafter so, yes, you could claim the difference back against tax (not NI)
Interestingly with 1kWh of electricity costing around 30p and a car covering around 3 miles per kWh you would need 10ppm to cover it. Much more if charging at public chargers. Also you would likely need to install a proper charger at home.
I’m sure someone can confirm or correct me on that.
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