Hi
I have just taken a job working for my dad's firm. Within this he has said he will meet the cost of a vehicle somehow - but it all seems really vague!
Now having worked and had company car's in the past, I have paid this off my tax bill per month and any business miles i do I reimburse using the company fuel card.
Basically, being a family firm...he has suggested if I buy a car he will pay me a set amount per month to cover loan repayment or a mileage limit - so i can avoid paying tax.
The problem is...i dont know what is reasonable per month to ask for and the figure of 35p a mile has been aired by him.
now on my calculations if i were to buy a used car for around £15,000 that did say 25mpg average...
this would cost me:
over 60 months on about 8% APR - £300 a month
Mileage - say i did 50 a day - thats 250 a week - so 1000 a month at 35p a mile = £350 - approx cost of £5 a gallon (25mpg) = £200
giving me £150 a month potential profit off fuel for running costs
My question is - what is the norm with car tax? if he gives me this allowance for a loan, would he pay tax on that? is it also normal to pay a fee per mile i cover for the business on top of this?
My other reluctance is to buy a car personally and take a loan out as I am looking to buy a house shortly - in our circumstances, are there any benefits for my dad buying the car through the business? or is leasing a good option?
Any advice would be really appreciated as I am totally baffled! - I also want to work the best package out for me, but at the same time not rip him off....a fair compromise is whats needed!
Thanks for your help in advance!
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if he is paying for it, and you are working for him, you have to pay tax.
I would suggest he pays you an allowance of 350 month, in your wages, you pay tax on it,
You claim from him 35 or 40 pence mile for each business mile for running the car.
thats about the commercial rate.
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TourVanMan TM < Ex RF >
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I think I am right in saying that 40p per mile is the highest sum you can be paid for mileage, without having to pay tax on it.
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IIRC the 40p figure can be used to claim back allowances from IR if the employer is paying you less than this.
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pmh (was peter)
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The secret is to work out the total tax liability for you, your father and his business based upon all the options.
You can be paid 40p a mile with no tax for the first 10,000 miles, and 25p a mile after that. As for NIC you pay no NIC at all, if the mileage does not exceed 40p a mile, however many miles you travel.#
You need to talk to his accountant.
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You need to talk to his accountant.
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ditto.
second that.
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