Hello!
Bit of Friday afternoon guesswork required!
Am looking at a job I'm very interested in (would also involve relocation away from the ghetto I currently live in) and includes a company car or car allowance. If the allowance was chosen, it would be just short of £5k a year... so, what company car might one expect to get based on that?
(I know I have to apply, be interviewed, get the job and pass probationery period before I can have the car, but I'm just interested!)
Thanks!
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Phew Pologirl, that must be quite some job - either that or it's all car and no salary. The answer is, it all depends. Last year, my cash alternative to the car was 3,000, which would have generated me 16k worth of car. This year, they have revalued the work pound, and my cash alternative is 4,800. But it still only generates me the same value of car.
So it just depends how generous your employer is, and you should be aware that all employers are different.
If you go to www.cartax.co.uk with your credit card, for about £20 you can see whether you are better off with a car or the cash. (I must declare a slight interest in that this website is run by my employers, but I get absolutely no benefit if you do or don't use the site.) It will compare the cost of keeping your 96 Polo with that of running a brand spanking new company car, or will compare the cost of running a brand new car with a brand new company car.
The discrepancy as to whether an individual is better or worse off will depend on miles driven, own insurance costs etc. If you're carmad100000001 (no offence, Chris), then given the astronomical cost of insuring say a soft top MG with a London postcode, then if you REALLY want that particular car your poor employer will have to pay a fortune in insurance.
Watch out for the tax you incur. If you can bear to drive a nice pipe & slippers car, like a slow Passat then your emissions will be much lower and you'll pay less tax. Carmad1000000001 will be paying the full 35% of the value of his car annually - and enjoying every mile he drives. If a 40% taxpayer with a gas guzzler, that means that you pay uncle Gordon 14% of the list price of your car annually. If a 22% taxpayer with a low emissions car (155g/km), you'll only pay uncle Gordon 3% of the list price of your company car annually.
StuW & I would rather have the cash and stick to our old bangers. Unless you REALLY NEED a brand new car - like Chris does - then stick to your beloved and slightly battered Polo with the door that didn't quite shut. You can drink a LOT of champagne on the difference! Probably a full bottle every other day. That'll make you think twice about your new car that'll quickly become old and tatty and you can't change it even if you want to.
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Phew Pologirl, that must be quite some job - either that or it's all car and no salary. The answer is, it all depends. Last year, my cash alternative to the car was 3,000, which would have generated me 16k worth of car. This year, they have revalued the work pound, and my cash alternative is 4,800. But it still only generates me the same value of car.
So it just depends how generous your employer is, and you should be aware that all employers are different.
If you go to www.cartax.co.uk with your credit card, for about £20 you can see whether you are better off with a car or the cash. There's a demo version there as well. (I must declare a slight interest in that this website is run by my employers, but I get absolutely no benefit if you do or don't use the site.) It will compare the cost of keeping your 96 Polo with that of running a brand spanking new company car, or will compare the cost of running a brand new car with a brand new company car.
The discrepancy as to whether an individual is better or worse off will depend on miles driven, own insurance costs etc. If you're carmad100000001 (no offence, Chris), then given the astronomical cost of insuring say a soft top MG with a London postcode, then if you REALLY want that particular car your poor employer will have to pay a fortune in insurance.
Watch out for the tax you incur. If you can bear to drive a nice pipe & slippers car, like a slow Passat then your emissions will be much lower and you'll pay less tax. Carmad1000000001 will be paying the full 35% of the value of his car annually - and enjoying every mile he drives. If a 40% taxpayer with a gas guzzler, that means that you pay uncle Gordon 14% of the list price of your car annually. If a 22% taxpayer with a low emissions car (155g/km), you'll only pay uncle Gordon 3% of the list price of your company car annually.
StuW & I would rather have the cash and stick to our old bangers. Unless you REALLY NEED a brand new car - like Chris does - then stick to your beloved and slightly battered Polo with the door that didn't quite shut. You can drink a LOT of champagne on the difference! Probably a full bottle every other day. That'll make you think twice about your new car that'll quickly become old and tatty and you can't change it even if you want to.
Good luck with the job.
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Click through to New Car Leasing (in the column to the right) and they have links section which takes you to a rather nifty cash v car calculator which is free.
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As mapmaker says it all depends....
Remember that the £5K car allowance they pay you will attract tax and NI - if you're "lucky" enough to be a higher rate taxpayer then suddenly your seemingly large allowance suddenly is rather smaller.
www.cashorcar.co.uk is a site that can help the calculations and will then do the sales bit and recommend a lease deal. It's a free site to use. To do an accurante calculation you need to know things like how much the company will pay you per mile for business use in your own car.
Good luck with the job.
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For what it's worth, if you take the allowance and run your own car, you can claim tax relief on the difference on what your employer pay you per mile and the Inland Revenue rate per mile.
e.g. if you are reimbursed at 28 ppm, and the IR limit is 40ppm, you can claim back 23% of 12ppm. May not sound much, but i got £150 back and my colleague got £300 back.
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Thanks ever so much! Blimey I'm feeling dizzy just reading that!
The job is for a public sector/voluntary organisation, Media/PR person with responsibility for a region, hence the car. I have no idea about company cars and things, despite sitting through months of the bloke I live with agonising over taking the car or the allowance with his job - I just assumed I would never be in that position so developed the ability to tune out and still look interested!
Unfortunately I share the "really really want a shiny new car" gene with carmad0000000001 (or whatever it is), just wasn't expecting it to be that much of a car given the type of organisation it is.
Will let you know if I even get an interview! (Oh and I don't think I could bear to part with Polo - might keep him nurtured and polished for my future nephews and nieces!)
Hmmm.
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You've had your brand new car all day and all you've done is complain about its having too many lights on the dash board....
I assume it's 5,000 per annum, by the way.
If there's a lot of driving to do, then the tax relief referred to above may make a big difference. This is because if he gives you your £5,000, your employer 'pretends' that he has given you a car. So all he will reimburse you is the cost of petrol per mile, with no contribution to running costs. So say 12p per mile.
However, the Inland Revenue thinks that you have been given an extra £5,000 of salary. They don't pay any attention to what your car allowance situation is. So they allow you to have 40p per mile in expenses & contribution to running costs. The 28p per mile is then claimable as a tax deduction. This is worth another 11p per mile, free from Uncle Gordon.
(My first car was completely paid for by my employer in profit from mileage.)
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You've had your brand new car all day and all you've done is complain about its having too many lights on the dash board....
Not the lights exactly... just lights that shouldn't be there. The blue dials are one of the few things I *do* like!!
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I don't think my Polo (early 80's) does warning lights. The newer the car, the more there is to go wrong, the more there is to tell you there might be something wrong. Like a timing belt light that comes on at 180,000 when it was changed at 179,950. How annoying...
So stick to the old one - or buy an older one & cure that gene!
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