Work related question, company car tax

[yaktrebor]

From the list, it is easy to see that Diesel cars hold their value a great deal more than petrol and hence, lower monthly rates compared to the MRP of the car.

Plus, there are much better cars available on the diesel list.

[simonsheil]

If you do go car allowance and buy a car, if you take a loan to buy the car the repayments are deductable against tax. This was informed to me after i had bought mine so have not looked into it in detail how much better off you are.

[yaktrebor]

:confused:

Are you sure?

I know that our accountant told me that, if the car cost more to run in a year than I claim, then I could claim the tax back on the difference.

But with the rates I get, this would never happen.

[simonsheil]

they are definetley deducatble it is to do with paying for somthing you use for work, same as you can deduct ppe gear agianst work if you want. Several people at work do it, although as i said i already owned my car when i started.

[texasjohn]

I think in that case you would only be able to tax-deduct a pro-rata amount of 'use' on the car.

i.e. if I did 3000 business miles and 7000 private miles I would be able to claim 30% of the costs and depreciation as tax deductable.

The 'claiming back 40p per mile upto 10k and 25p thereafter per mile' as discussed above is probably a simpler way to do things and probably why this rule exists.

I could therefore take the cash, buy a car, and claim 15p per mile from the company, then for each business mile I'll get another 25p per mile (40p-15p already paid) in tax relief.

So if I do 10000 business miles I'll get £4k anyway...£1500 from company and £2500 in tax relief.

When you look at it like that buying a car and taking the cash is a good option because I am sure I would not get the extra 25p a mile in tax relief with a company car (although I'd still get the 15p from the company).

Hmmm.

[tinkerbell]

Mileage Allowance Payments

Mileage Allowance Payments (MAPs) are defined as

[texasjohn]

Thank you!

[tinkerbell]

I could therefore take the cash, buy a car, and claim 15p per mile from the company, then for each business mile I'll get another 25p per mile (40p-15p already paid) in tax relief.

So if I do 10000 business miles I'll get

[tinkerbell]

Thank you!

Your welcome

I need my bed now though :( :(

[texasjohn]

Makes sense.

I woke up and unable to get back to sleep but I think I'm going to have another go now!

Cheers

[yaktrebor]

TexasJohn:

This company car thing, must be 'doing your head in', if you were up until 2 in the morning.:eek:

Tinkerbell:

I hope that Peter Pan doesn't know what you are up to in the early hours of the morning.

[texasjohn]

No, the company car thing wasn't keeping me awake. Put storage heaters on for first time this year yesterday and the bedroom was too hot which is why I woke up! (switched all but the front room one off now and it's just about right )

[thegavsters]

I think in that case you would only be able to tax-deduct a pro-rata amount of 'use' on the car.

i.e. if I did 3000 business miles and 7000 private miles I would be able to claim 30% of the costs and depreciation as tax deductable.

The 'claiming back 40p per mile upto 10k and 25p thereafter per mile' as discussed above is probably a simpler way to do things and probably why this rule exists.

I could therefore take the cash, buy a car, and claim 15p per mile from the company, then for each business mile I'll get another 25p per mile (40p-15p already paid) in tax relief.

So if I do 10000 business miles I'll get

[tinkerbell]

you will probably find that you wont get

[texasjohn]

I'd sooner get it monthly as a result of a higher tax code than wait 'til October each year for a cheque!

Yes, it is nice to have it as a lump sum but you're better off under the tax code system from a cashflow and 'cost of money' perspective.

What if I do 20000 miles in the first year, get an 8k personal allowance in year 2, then do 0 business miles during year 2, as an example?

Will I then have to pay a lump sum back in year 2 or would I get a lower tax code during year 3?

TIA

John

[tinkerbell]

I'd sooner get it monthly as a result of a higher tax code than wait 'til October each year for a cheque!

Yes, it is nice to have it as a lump sum but you're better off under the tax code system from a cashflow and 'cost of money' perspective.

What if I do 20000 miles in the first year, get an 8k personal allowance in year 2, then do 0 business miles during year 2, as an example?

Will I then have to pay a lump sum back in year 2 or would I get a lower tax code during year 3?

TIA

John

Where the amount due is under

[cookie_boy2000]

okay, now i may be acting really thick here, but i've just opted out of the fully expensed co. car scheme and gone for the cash option/mileage instead.

My question is:

As they will pay me 14p per mile (diesel) and the government allowance is 40p per mile (for the first 10000 miles), does this mean I will also get the difference of 26p per mile back as tax relief? i.e. I will still get 40p per mile but split between my employer and the government?

I'm really confused

[sdenny]

okay, now i may be acting really thick here, but i've just opted out of the fully expensed co. car scheme and gone for the cash option/mileage instead.

My question is:

As they will pay me 14p per mile (diesel) and the government allowance is 40p per mile (for the first 10000 miles), does this mean I will also get the difference of 26p per mile back as tax relief? i.e. I will still get 40p per mile but split between my employer and the government?

I'm really confused

The rate is 40p up to 10k miles and i think 25p after.

You can claim tax releif on the difference from those rates and the HMRC rates, thus in you case you can claim tax relief on 26p per mile (up to 10k).

If you drive 5k miles, they'll add 5000 x .26 to the amount you can earn before paying tax, but I don't think this would work out to the same figures as 5000 @ 40p.

[Dr Zoidberg]

okay, now i may be acting really thick here, but i've just opted out of the fully expensed co. car scheme and gone for the cash option/mileage instead.

My question is:

As they will pay me 14p per mile (diesel) and the government allowance is 40p per mile (for the first 10000 miles), does this mean I will also get the difference of 26p per mile back as tax relief? i.e. I will still get 40p per mile but split between my employer and the government?

I'm really confused

You get tax relief on the difference between the two figures , so you'll get back either 20% of the 26p (5.2p) if you are a standard rate tax payer , or 40% of it if you earn lots