company car V car allowance

C

comraid

Registered User
Messages
25
I am starting new job which offers a good company car scheme . I will be doing little business mileage and am wondering whether to take up the company car and the implications for BIK or to opt for car allowance and to buy and run my own car.

Any advice please ?
 
Sorry about above..

1. estimate number of business miles and multiply by mileage rate paid

compare with

2. calculate bik ... this is based on 30% of original market value.. but can be reduced by amount of mileage

In a large mileage situation, and when insurance costs are not high then charging the company for mileage is generally a better option.
In your case mileage is low and you should get an accountant to do some calculations for you. Or possibly the new employer has a company accountant who can calculate this for you.
 
Is the car allowance a set amount each month? If it is it is liable to income tax.

Many indoor staff (managers etc) who do little mileage generally have the option of mileage allowance or car. Many companies have moved over to the mileage allowance
 
There is a maximum amount per km that can be paid tax free - this is known as the civil servants rate. Most company agree a rate - usually below civil servants rate. Mileage expenses are paid tax free as they are in lieu of cost of running car for business and the rate paid is to cover maintenance, running costs and devaluation of car due to additional mileage put on car. If company pays more than maximum tax free rate then the difference is taxable.
 
Thanks for replies - is there a 'standard' mileage rate applied by most companies and any idea what it is ?
 
You must log in or register to reply here.
Back
Top