# Company car help please :)



## Gazjs (Nov 26, 2009)

When using a company car, if you use it for no private use what so ever, is it still taxable? Done some reading, but it is all alien to me and I would appreciate some help. 

I have to make a decision between a company car or an allowance (taxable) plus mileage expense. 

Any help or guidance is very much appreciated :thumb:


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## slimjim (Mar 22, 2007)

You can fill out a form saying you don't use car for private miles, so I take it your field service working from home. As travelling to work everyday isn't classed as business mileage.
Also if the tax man or your work is a bit slow in changing your tax code you can end up like I did on a negative tax code. 
Only benefit of a company car is if you can get a nicer car you wouldn't normally buy yourself and you don't have any bills.

I used to self source my cars until last year when we were made to take one. Preferred self sourcing and stupidly we all got expensive cars and didn't care about Co2 . A few of us regret it now .


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## Two's Company (Feb 11, 2006)

The short answer is yes the value of the taxable benefit which is based on a % worked out on co2 emissions multiplied by the list price is taxes on you as income. 

You could complete a tax return and claim that the car is 100% business use. Commuting to a permanent place of work isn't business use though. 

Unless you do loads of personal miles in it or want to have a shiny new car every 3 years the allowance is likely to be more beneficial to you.


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## Gazjs (Nov 26, 2009)

slimjim said:


> You can fill out a form saying you don't use car for private miles, so I take it your field service working from home. As travelling to work everyday isn't classed as business mileage.
> Also if the tax man or your work is a bit slow in changing your tax code you can end up like I did on a negative tax code.
> Only benefit of a company car is if you can get a nicer car you wouldn't normally buy yourself and you don't have any bills.


Thanks for this.

I didn't realise the travelling to work part. The role will be a site engineer. Various sites, various locations. In this instance, what is classed as "work", will it be the local office for example? So, any travel I would deduct the distance to and from the office? Basically however, I now understand that the car will be used for private use.



Two's Company said:


> The short answer is yes the value of the taxable benefit which is based on a % worked out on co2 emissions multiplied by the list price is taxes on you as income even if you don't use it for personal use.
> 
> Unless you do loads of personal miles in it or want to have a shiny new car every 3 years the allowance is likely to be more beneficial to you.


Would this be the BIK label attached the contract then? It's all very confusing. I can see myself doing a shed load of business miles. Travelling all over Scotland. I would have kept personal use to a minimum, but this sounds like it holds no benefit what so ever?


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## Gazjs (Nov 26, 2009)

This may help some people who are kindly offering me advice. From my contract

"Your appointment and location will entitle you to reimbursement of the cost of travel from home to site. The private use of a company car will be assessed as benefit in kind by the HMRC on a fixed scale"


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## Two's Company (Feb 11, 2006)

This might help.

http://www.hmrc.gov.uk/cars/company-cars-factsheet.pdf

If you or your family have any private use you will be taxed on the full benefit in kind no matter how little.

If you then get paid an allowance for business miles to cover petrol then depending on how much it is this could be taxable.

See here for fuel rates you can get for your business miles

http://www.hmrc.gov.uk/cars/fuel_company_cars.htm


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## Mulski (Aug 19, 2009)

Car Allowance every time - it put you in control on what you use the allowance for, I.e. you don't need to spend it all on the car, or you can use it as a contribution towards a better spec motor. Company cars makes and models are usually defined by the company, and you could end up doing 30k per year in a Punto, your choice, but I know what I would do.

Cheers


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## Gazjs (Nov 26, 2009)

Two's Company said:


> This might help.
> 
> http://www.hmrc.gov.uk/cars/company-cars-factsheet.pdf
> 
> ...


Very very helpful :thumb:

I'm on the understanding then, that as long as the company prove I use no private use then I won't be taxed on the car. As my base is home as such.

Then I will just need to make a call to see how the fuel works and take tax from that.

Thanks again.

I keep saying car, it cold well be a van I suppose :driver: :lol:


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## Gazjs (Nov 26, 2009)

Mulski said:


> Car Allowance every time - it put you in control on what you use the allowance for, I.e. you don't need to spend it all on the car, or you can use it as a contribution towards a better spec motor. Company cars makes and models are usually defined by the company, and you could end up doing 30k per year in a Punto, your choice, but I know what I would do.
> 
> Cheers


Yeah, that is totally true, and very understandable. Just trying to work out wether it's going to be frowned upon asking what vehicles are in the given bracket, before I even start employment :lol:


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## Mulski (Aug 19, 2009)

Gazjs said:


> Yeah, that is totally true, and very understandable. Just trying to work out wether it's going to be frowned upon asking what vehicles are in the given bracket, before I even start employment :lol:


If they are giving you the option between CC and CA, then I don't think it's inappropriate to ask what the CC list is for your level/position in the company in order to make an informed decision.

Cheers


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## Two's Company (Feb 11, 2006)

You'll have to prove no private use by mileage logs and maybe get it written into context that you can't use it privately. 

Although If you do massive business miles then so you think you can run your own car on the allowance after tax plus fuel allowance of say 14p a mile? 

If I did a lot more business miles I would get a company car to save the hassle of insurance, depreciation, maintenance which will all add up on big miles.


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## Gazjs (Nov 26, 2009)

Two's Company said:


> You'll have to prove no private use by mileage logs and maybe get it written into context that you can't use it privately.
> 
> Although If you do massive business miles then so you think you can run your own car on the allowance after tax plus fuel allowance of say 14p a mile?
> 
> If I did a lot more business miles I would get a company car to save the hassle of insurance, depreciation, maintenance which will all add up on big miles.


Mileage logs shouldn't be a problem, nothing excel wont help with hopefully.

Yeah, I'm not sure how the fuel is calculated if taken the company car. Need to make a call about this. As to wether it is an allowance (stated and attached to the car allowance section and close to that you have quoted) or a fuel card or similar. Unsure right now as all this talk is extremely new to me.

Agree with last part. Was my thinking, especially as being a site engineer (civil engineer) my vehicle could well be required to drive in a building site, through a field unclassified roads etc and this will surely lead to punctures and associated wear and tear. Which as I understand, will be covered by the company. Not to mention the cost of insurance etc.


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## Gazjs (Nov 26, 2009)

Mulski said:


> If they are giving you the option between CC and CA, then I don't think it's inappropriate to ask what the CC list is for your level/position in the company in order to make an informed decision.
> 
> Cheers


Makes perfect sense, just don't want to enter into unchartered territory :lol:

TBH, I am just extremely grateful and appreciative of being offered this as part of my contract in the first place that I am not too bothered about what I am given.

Well, as long as it isn't a pink Ford KA or something :lol:


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## Ben_ZS (Sep 28, 2008)

If you want to use a company car for private use you will either have to pay fuel benefit tax on top of the normal company car tax, or put the fuel in yourself out of your own pocket and claim the business mileage back through your employer at the relevant rate for the cars engine size. The rates have recently changed' see here;

http://www.hmrc.gov.uk/rates/travel.htm

For example, I am a travelling service engineer and have a Skoda Octavia Estate 1600cc Diesel. I pay £55 per month company car tax and put my own fuel in and claim 12p per mile back. If you are wise you will drive economically and '_go the long way_' and your private fuel could be partly/fully paid for each week.

If you paid the fuel benefit tax and had a fuel card you could use as much fuel as you wanted privately. For me on my car the fuel benefit bumped it up to £140 per month, which meant that I would need to do around 1000 miles per month to even break even.


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## Gazjs (Nov 26, 2009)

Ben_ZS said:


> If you want to use a company car for private use you will either have to pay fuel benefit tax on top of the normal company car tax, or put the fuel in yourself out of your own pocket and claim the business mileage back through your employer at the relevant rate for the cars engine size. The rates have recently changed' see here;
> 
> http://www.hmrc.gov.uk/rates/travel.htm
> 
> ...


Things sound so much easier to understand with an example. Thanks very much :thumb: nice little tip also 

Sounds like the fuel card is not the way to go then. In your case anyway. Don't think I could be bothered driving 1000 miles in my own time after driving a lot during work :lol:

12p is what is listed for me also attached to the car allowance part. So hopefully the same for CC.

Thanks, great help :thumb:


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## Ben_ZS (Sep 28, 2008)

Either way I've worked out that it costs around 10-12p per mile in diesel in my Skoda. So I pay 10-12p per mile(  ) and £55 per month for a brand new, fully maintained, very practical car.


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## andy665 (Nov 1, 2005)

Mulski said:


> Car Allowance every time - it put you in control on what you use the allowance for, I.e. you don't need to spend it all on the car, or you can use it as a contribution towards a better spec motor. Company cars makes and models are usually defined by the company, and you could end up doing 30k per year in a Punto, your choice, but I know what I would do.
> 
> Cheers


Massively sweeping statement as it depends entirely on the cars offered and the allowance offered


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## SteveTDCi (Feb 8, 2006)

If you have a tracking system installed hmrc accept certain systems as proof of no private miles being covered.

I would also take a company car over supplying my own, if it breaks its down to the company to supply a car and if things go wrong and you end up unemployed you don't have to worry about a car under contract.


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## Gazjs (Nov 26, 2009)

Ben_ZS said:


> Either way I've worked out that it costs around 10-12p per mile in diesel in my Skoda. So I pay 10-12p per mile(  ) and £55 per month for a brand new, fully maintained, very practical car.


Sounds a no brainier when put this way doesn't it. Anybody would accept a car, fully paid for and only needs driven for £55. Thanks for the explanations. Early helped.



andy665 said:


> Massively sweeping statement as it depends entirely on the cars offered and the allowance offered


As above, also, what the car needs to be used for. Do you want your own personal pride and joy, driving through a building site for example 



SteveTDCi said:


> If you have a tracking system installed hmrc accept certain systems as proof of no private miles being covered.
> 
> I would also take a company car over supplying my own, if it breaks its down to the company to supply a car and if things go wrong and you end up unemployed you don't have to worry about a car under contract.


Yeah, I have decided that the CC is the option I am going to choose. Now just to find out how I can prove no private miles, since my home will be classed as work as such. If this cant be done, then it's not really a big deal though TBF.

As you say, it makes sense with the nature of work etc where servicing and repairs could be a reoccurring feature.


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## Two's Company (Feb 11, 2006)

Ben_ZS said:


> Either way I've worked out that it costs around 10-12p per mile in diesel in my Skoda. So I pay 10-12p per mile(  ) and £55 per month for a brand new, fully maintained, very practical car.


If you have the option of a car allowance instead of a car then the cost to you is the net salary you would get from the allowance plus the tax on the company car.


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