Car Allowance v Company Car

T

Timbos2

Guest
Hi
I have been approached by a competitor in my field who wants to employ me but he does not provide a Co. car, whereas I have one at the moment, value new 40 k, so taxed accordingly. My co. travel is about 15 - 20 k miles.
My question is , what car/salary allowance should my prospective new employer give me to cover the loss of the company car ( outside of the enticement bump up )

Thanks
 
Not sure if it helps any, but I have seen one employer offer EUR7k car allowance or a car worth EUR30k and another offer EUR10k or a car worth EUR45k.

What value you would put on it comes down to personal circumstances I guess. You could add up the costs of ownership such as depreciation, tax, insurance, servicing etc. of the car you currently have to give an idea.

If you are going to do 15-20k miles per year in your own car for work purposes, the mileage rate they pay is likely to be very important.
 
my company offers €12k allowance which is taxed plus 27c/km or 60c/km without allowance. Its a good deal from what I'm told.

I take the allowance as I don't do that much but I woorked it out of I go over about 15,000km per year then I should go for the 60c/km rate

I prefer the car allowance option as its money in the pocket, no BIK and you get to chose the car of your choice rather than an opel vectra
 
I have the option of a car to the value of €35k or €10k allowance.
 

Couple of questions please:
Is the Eur 12k allowance is taxed as standard income, i.e as salary @ 21 0r 40%?

The 27c/km is tax free i.e a valid expense?
 
Thanks Guys - I'm meeting him tomorrow/today where he's going to make the offer, so I have a rough idea, although my calculation was
40 k over 5 years is 740 per month at 7 %, residual owing after 3 years would be just over 15 k which would leave me 5 k in equity , assuming I bot one that would hold value.

So call it 600/month + 300 petrol/month + Insurance + Maintenance.

I thought 15 k would be about right - but I guess it depends on the per mile business rate

Will post what I get offered

thanks
 
collis said:
Can you tell us which option did you take, and what were the reasons?
Click to expand...

I opted for the allowance. I am office based so can't reduce the BIK with business mileage. I also do less that 10K kms a year so don't have a huge petrol bill. At the time I had an 18 month old car that was fully paid for.

I worked out the running costs of the car I had and it was about €300 a month (depreciation, insurance etc) whereas to take the comany car would reduce my take home pay by about €400 a month.

So €100 per month in the difference, plus the net of €10k allowance (approx €400pm) leaves me better off by €500 a month that I can choose what to spend on.
 
collis said:
Couple of questions please:
Is the Eur 12k allowance is taxed as standard income, i.e as salary @ 21 0r 40%?

The 27c/km is tax free i.e a valid expense?
Click to expand...
12k is taxed at 41%
the 27c/km is tax free as an expense
 
Hi

Does anyone have a spreadsheet or online tool they could share to help model the "car allowance" versus "company car" decision?

I guess it a desicision lots of finanacial whizzes face every 3-4 years and someone must have a great spreadsheet? It would be great if you could share it!

Thanks

Lanky
 
The problem I have with co. car is the BIK. I will only do 18,000km/year for business so I would pay a lot of BIK on a car worth about 35k. The choice for me also is terrible. We have a deal with GM so my options are limited to Astras/Vectras. Next level up get Saab but thats nothing to shout about.

How much has the new employer offered for a car allowance? If your mileage is what you think it will be, try to get a flat rate of about 90c/mile so it is tax free and the more you do, the better it is.
 
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