Company Cars

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Mon 31 Aug 2020 15:59
Company Cars - BusinessCar

Some company car users at work have handed their keys back to avoid company car tax during lock down saving them a small fortune.

I have to use my own car for work and am compensated at 12ppm, I claim the difference between 12ppm and 45ppm from HMRC at the end of the year.

We have two cars at home only because I do the business trips otherwise we would only have one car.

At the end of this year it is likely that there will be very little refund from the HMRC but I still have the depreciation and maintenance costs - service needs to be done, vehicle excise duty and insurance needs to be paid. Work says I still need the car "in case".

Are there any other allowances for the car that I can claim from HMRC?

Edited by BusinessCar on 31/08/2020 at 16:24

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Wed 2 Sep 2020 14:37
Company Cars - Zippy123

Unless you are a business or sole trade / partnership I don't think there are any other allowances.

The difference you can claim back is 45p per mile less the mileage rate your company gives you. For example 45p - 12p = 33p x your tax rate say 20% = 6.6p refund. This is for the first 10,000 miles. Everything after that, replace the 45p with 25p in the above calculation.

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Wed 2 Sep 2020 14:57
Company Cars - Falkirk Bairn

If all you get is 12p per mile I think the employer is miserly

Long retired but I used to get say £300+ per month plus 17/18p per mile in the last job.

The best car scheme I was ever in was £350 per mth and the full 45p/25p per mile.

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Wed 2 Sep 2020 15:07
Company Cars - Zippy123

A lot of employers pay the HMRC rates and the bands / rates have become meaner as cars apparently get more fuel efficient (laugh).

For example, in a car with an engine up to 1400cc they assume that you can achieve 52.7MPG - in real world driving and to my mind that is totally unrealistic.

https://www.gov.uk/guidance/advisory-fuel-rates#rates

There are not many company cars over 2l nowadays as companies want to be seen as being "green". Ours has a 130g co2 cap now and will be reducing at least 5% per year.

Edited by Zippy123 on 02/09/2020 at 15:11

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Wed 2 Sep 2020 15:54
Company Cars - concrete

I removed myself from the company car scheme many years before retirement. The 45p rate for the first 10k miles and then 25p per mile after that was adequate enough. I was travelling over 25k mpa so it was a no brainer for me. The mileage was claimed monthly along with my general expenses and was not subject to income tax. The company paid it in full to me and they then claimed it back from HMRC. If any employer told me to do that myself I think I would change employment. It is so easy for an accounts dept. to deal with this instead of you doing it. What a cop out and all for 12 miserly pence per mile. It is a pity that the lockdown has meant your mileage is low and only saving is the fuel, however stick with it, better times ahead. Much better than being taken to the cleaners by HMRC for BIK.

Cheers Concrete

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Wed 2 Sep 2020 19:42
Company Cars - daveyK_UK
Agree with concrete

It’s very straightforward for an employer to pay employees the recommended 45p/25p.

I found most employees were happy to do the 10k at 45p but soon wanted to be put in hire cars/trains when it dropped to 25p.

They had a point, 25p a mile is pathetic and barely covers cost; for younger drivers with higher insurance it does not cover costs.


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Wed 2 Sep 2020 20:52
Company Cars - RT
Agree with concrete It’s very straightforward for an employer to pay employees the recommended 45p/25p. I found most employees were happy to do the 10k at 45p but soon wanted to be put in hire cars/trains when it dropped to 25p. They had a point, 25p a mile is pathetic and barely covers cost; for younger drivers with higher insurance it does not cover costs.

Fixed costs are assumed to be covered by the 45p for the first 10,000 miles, that's £4,500 - the ongoing 25p/mile is only to cover direct running costs, ie fuel, servicing, tyres

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Wed 2 Sep 2020 21:00
Company Cars - Zippy123

Fixed costs are assumed to be covered by the 45p for the first 10,000 miles, that's £4,500 - the ongoing 25p/mile is only to cover direct running costs, ie fuel, servicing, tyres

That's not quite how I understand it. The extra 20p between 25p and 45p is meant to cover fixed overheads like excise duty and insurance.

The problem with the system is that it is a one size fits all solution. It would be far better to get everyone to keep records of private vs business miles and apportion all bills including fuel proportionately. You could even brim to brim fill on each business trip and claim exact fuel costs. Buy a car, sell the car and work out depreciation and apportion that. Thing is the GOVT and tax man don't trust us or don't think we are smart enough.

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