Theoretical scenario....

 

Company A buys a company car for employee Joe. Instead of buying or leasing a new car, they give Joe £6k to go and buy whatever he wants. The car would be registered in the company name and maintained etc by them.

 

Surely this is a rubbish deal? Joe pays company car tax based on the list price of the car when it was new, not the £6k that the company paid for it. If you're doing a lot of miles and want a reasonably decent motorway car, you're buying something of a "proper" size like an Octavia, 3 Series at least, but paying the same tax as someone who gets the new car not the crappy 5 year old version?

 

Am I missing something? Why would Joe accept the company car rather than using his own car and claiming the 45p a mile? (ignoring the 10k mile upper limit for 45p/mile)

It does sound like a poor deal for the employee, but some employers make a habit of treating staff like crap.

Sounds abit of an odd thing to do,

 

They will be starting with an 80k plus car for anything a resonable size so will end up costing them more in long run,

 

I would prefer to buy my own i think and get the 45ppm and get a small diesel

At least the employee can choose his own car to suit his needs and style.

Is the £6k a one off payment or £6 every year.  My old company offered an annual payment instead of a Co Car but the employee owned the car and it had to be bought new and kept for no more than 3 years.

 

If a one off payment then the deal makes no sense for the employee

Is the payment split monthly - is it a company car allowance, if so then the employee purchases the car and has the liability but therefore doesn't attract any BIK.

 

If the other way and they "gift" the employee the £6k and they buy the car then it's a fairly dumb short sighted thing to do for both employee and employer IMO

ok, I've now found out that the amount in question is £13k, and I can buy whatever I want with that amount.

 

I'm attracted to, say, a 63 plate Octavia with perhaps a 1.4 petrol engine but finding out the list price and CO2 is not immediately apparent. Therefore I might get myself a new Fabia, to save the arseache.

 

Comments?

Comments?

 

I think there are quite a few unanswered but pertinent questions in the earlier posts that need answering first...

Fair enough. The company buys the car from the garage/trader up to £13k. (As far as I can make out they are financing it, not paying for it as a lump sum from cash). The car stays in the company name. They take responsibility for all aspects of maintenance etc.

 

The car stays for two years and then the cycle starts again. The difference the second time around is that you can use the trade-in value of the car to "boost" the £13k offered to buy the second car, so in effect your budget becomes say £18k for year 2, £23k for year 3 etc.

Also been looking at a new 1.0 EcoBoost Fiesta, the 100ps version can be bought new for around £13k.

So is the Company as the Registered Keeper Insuring it for Business use with Group Insurance, or is it with you as a Named Driver on their Insurance.?

How the company finances the car is immaterial - they could pay for it in washers if they like!

 

Who will the car be allocated to? Will they take it home at the end of each day? Will they have use of it privately at evenings, weekends, during holidays etc?

 

If an employee has exclusive use of the car then it's a company car and will attract company car tax.

 

If the car is left as a pool car, where everyone has access, the car is left at the work premises each night, then no company car tax liability.

Yes, the car would be for my use mainly, thus attracting BIK, but theoretically for use by any employee. The company arranges the insurance.