TDI inc. vRS Lease costs

[Muppit!]

Not a bad way of doing it, plenty of guys do. Just make sure your 'allowance' is big enough and remember that you won't have to pay Company Car Tax any more.

Personally though I would push to get the Octavia on your Company's approved list. Do they have any other VAG cars on it already; if so you ought to be half way there.

A reasonable way of doing things but remember, If you loose you job for any reason (redundancy, ill health. etc) you will not have your car allowance but still be responsible for the remaining amount of finance.

I suggest you also factor in the costs of insurances to cover these points in case (god forbid) the worst happens.

I would also check to make sure the car allowance payment is not classed as a 'Benefit in kind' as you may well still be liable to tax on the amount.

I have never obtained a company vehicle this way before but I believe that doing it this way, you are responsible for having appropriate insurance to cover business use, all fuel and road tax, servicing etc. All this has to be covered by the allowance.

I may be wrong. Perhaps there is a member out there who works for the Inland Revenue who could explain the situation.

[jlwah]

Perhaps there is a member out there who works for the Inland Revenue who could explain the situation

Doubt it. They're all busy schearching for some mislaid CD's aren't they?

[bahnstormer vrs]

AFAIK a 'car allowance' is taxable as income but not as benefit in kind (that's what happens when you have a car provided) and , yes, you need to make sure that your allowance and non-payment of Company Car Tax gives you enough to fully run the car.

If you have your own car on finance then there is a risk of not being able to afford it if you leave the Company BUT on the other hand if you have a Company Car and leave you lose the car.

Catch 22 !!

[radders]

Maybe I should explain this a bit better but firstly, let me point out that I do not work for the IR. I can only tell you what I know from personnal experience.

The IR rates for mileage are 40p per mile for the first 10,000 miles and then 25p per mile for every other mile until the end of the financial year. If you do a lot of miles, this can work out as a lot of money.

The other way is if your employer pays you an allowance every month (eg £500)and then they will pay you a lower amount for every mile you do. (eg 10p) You will be taxed as income on the £500 but you will be able to claim back the taxable difference between what your employer pays you (10p) and what the IR think is reasonable (40p or 25p). To make this a bit easier, you tell the IR your annual mileage (eg 30,000) and they then take the taxable (either 22% or 40%, depending on your salary but remember to include 12 months worth of £500=£6000). So, you would be owed 30p x 10,000 miles and 15p x 20,000 miles, which equals £6000. You would not get this money, but you would get 22% or 40% of this back on your tax code. Basically, you need to do a lot of miles to be able to buy a new car this way. If you don't mind the risk, you could also factor in the amount of tax you will save by not paying car tax to work out how much money you have to buy a new car with.

I know of some companies who pay higher then the IR rates eg 55p per mile. You will then have to pay the IR the taxable difference. Your employeer will be worse off on this system but you would be better off.

I used to be paid a monthly allowance with 12p per mile but now I am on the IR rates, which I find suits me better. I also have to have business insurance as my car always has a boot full of service equipment, which would be difficult to explain in the case of a accident. I know of some people (mainly sales reps) who do not have business insurance as they do not carry very much equipment in their cars.

The last thing to remember if doing this without an allowance is if you are off work long term ill, you are not driving your car so are not earning any money to pay the loan, which is a risk. Also, do you have a secure job. The last thing you want is to have a new car and no job to pay for it.

Hope this has helped a bit.

Mark

[auroan]

Business insurance isn't for carrying stuff. Its to cover the use of the car for business purposes (liablity insurance etc etc)

[radders]

Exactly. But I would have a few problems explaining all the stuff in the boot if ever I had an accident. Insurance companies will use any excuse not to pay out. The contents are covered by my company insurance policy anyway.

[auroan]

Exactly. But I would have a few problems explaining all the stuff in the boot if ever I had an accident. Insurance companies will use any excuse not to pay out. The contents are covered by my company insurance policy anyway.

But you mentioned most salespeople don't have business insurance because of this. If they don't and there working then they basically don't have any insurance.

It would only cost me an extra £8 a year for business insurance anyway.

[rggc]

Any company car drivers out there looked at the Octavia TDI's and have any prices for the lease costs??

I'm interested in Elegance 2.0 TDI vs vRS TDI vs L&K if anybody knows.

Hi, amazingly enough that is 2/3 of what I have been looking at this week. Based on full maintenance 25k miles pa and over 36 months with £560 of extras the vRS was £370 per month and the L&K was £394. This was thru Skoda finance, HSBC was almost £1000 more over 3 years.

Regards.

[radders]

Sales people are tight gits, aren't they?

[Timo]

Thanks for the info people. Still trying to get anything other than just fuel expenses. A vrs tdi in the distance somewhere I hope.